The Hindu Business Line : Merged entity promoter to hike stake in Sunline

IN a bid to enable the promoters consolidate their equity holding in the company, Sunline Technologies Ltd (STL) is planning to issue share warrants in favour of Dr Jayaram Chigurupati, the key promoter of Zenotech Laboratories that is merging with the company.

The STL board has recently approved the swap ratio for the merger of Zenotech Laboratories Pvt Ltd with the company and decided to change the name of the company to Zenotech Laboratories Ltd.

A proposal to offer shares of the merged entity in favour of Zenotech shareholders, in terms of the scheme of arrangement approved by the High Court, was also cleared by the STL board.

The STL board has also approved a proposal enhancing the authorised share capital of the company to Rs 16 crore from Rs 6 crore.

When contacted, the STL General Manager, Finance, Mr Sekhar Rao, told Business Line that Dr Jayaram Chigurupati now holds 34,000 shares, amounting to 0.62 per cent holding in STL.

Following the preferential offer of 7.5 lakh share warrants, his holding in the company would increase to 7.84 lakh shares, translating into an equity stake of 12.65 per cent on the expanded equity of Rs 6.19 crore.

Stating that the Andhra Pradesh High Court had cleared the scheme of arrangement for merging Zenotech Laboratories into STL, Mr Rao said the Zenotech shareholders would get five shares of STL for every one share held by them.

Upon merger of Zenotech into STL, Dr Chigurupati would get 70.61 lakh shares in the combined entity, resulting in a holding of 45.56 per cent on the further expanded equity of Rs 15.49 crore.

Zenotech Incorporation of US would get 24.12 lakh shares of the combined entity, equalling to a stake of 15.56 per cent.

The holding of Indian public in STL, which now stands at 68.29 per cent, would stand reduced to 60.02 per cent following the preferential offer, and further come down to 26.82 per cent on completion of the scheme of arrangement.

The Indian promoters of STL, who now hold 21.42 per cent stake, would have their stake reduced to 18.83 per cent after the preferential offer and further to 7.52 per cent after the merger, Mr Rao said.

Further, he said aimed at meeting the capital expenditure in connection with the setting up of biopharmaceutical facility and also to meet the increasing working capital needs, the company proposes to avail themselves of the necessary financial assistance.

Accordingly, a proposal for increasing the borrowing limits to Rs 50 crore was also cleared by the STL board, he added.