The Hindu Business Line : Kerala HC approves GTN Textiles demerger scheme

THE Kerala High Court has approved the Scheme of Arrangement between GTN Textiles Ltd and GTN Industries Ltd with regard to its demerger, pursuant to Section 391 read with the Section 394 of the Companies Act, 1956.

Accordingly a meeting of the of the Board of Directors of the company would be held here on December 17 to take on record the certified true copy of the order and the judgment issued by the High Court approving the scheme of arrangement, Mr E.K. Balakrishnan, General Manager and Company Secretary told Business Line on Wednesday.

The Board, at its meeting, would fix the record date to determine the eligibility of shareholders for issue of shares in the new company GTN Industries Ltd on account of the scheme of arrangement, he said.

The Board of Directors of the GTN Textiles Ltd at their meeting here on June 4, in pursuant to the recommendation of the Special Business Committee appointed by the company in connection with the demerger of its Aluva unit, had approved the scheme of arrangement.

The scheme will provide for the transfer of business activities of the Aluva unit along with investment of the company in Patspin India Ltd (i.e., 39.07 per cent of the equity share capital of that company) and the offices as well as its assets situated in Mumbai, Kolkata and Coimbatore to a new company — GTN Industries Ltd, proposed to be listed on the relevant Stock Exchanges on which the existing shares of the company are listed.

In consideration of the transfer of and vesting of the demerged business of GTN Textiles Ltd (transferor company), the shareholders would also own shares of the GTN Industries Ltd (transferee company), in the ratio of one share for every single share held in the transferor company. This swap ratio is based on the recommendations of independent valuers.

With effect from the effective date on demerger, as above, the name of GTN Textiles Ltd will be changed to GTN Industries Ltd and the name of GTN Industries Ltd to GTN Textiles Ltd, he said.

The shareholders and creditors of the company had earlier approved the scheme of arrangement. The Court's decision has already been communicated to the CSE, Kochi SE, NSE and the BSE, he said.

Since the High Court has approved it now the company would approach the Registrar of Companies for interchanging of names, he added.