The Hindu Business Line : RPG cos amalgamation cleared

Scheme of arrangement
Retailing business would be brought under one roof.
The arrangement would also enable appropriate consolidation and restructuring of operations of MWEL and GWCL .

Chennai , April 11

The Madras High Court has sanctioned the scheme of arrangement among the three closely held companies of the Kolkata-based RPG Group, paving the way for transfer of the music world division of Music World Entertainment Ltd (MWEL) to Great Wholesale Club Ltd (GWCL) and for amalgamation of Music World Ltd (MWL) with GWCL.

While the RPG group was instrumental in developing the companies, Spencer & Co Ltd, another company in the group, held the majority of the shares in all the three companies.

The other shareholders of the three companies are also companies within the group.

The three entities were engaged in the business of music retailing, real estate and investments.

Under the scheme of arrangement, which was sanctioned by Mrs Justice Chitra Venkataraman, after hearing the elaborate submissions of the counsels for the petitioners, Mr R. Murari and Mr P.S. Suman, the shareholders and creditors of the companies would be bound by the new scheme with effect from December 1, 2005.

The boards of directors of the companies had approved the scheme on November 23, 2005.

Notable feature

According to the proposals submitted to the Court by the companies, the notable feature of the scheme is that retailing business of the entities would be brought under one roof with the aim of benefiting the large number of customers by providing a wide range of products.

While MWL was engaged in the business of online music retailing, GWCL was concentrating in managing super-markets and hyper-markets at various centres in the country under the Spencer's brand name.

The arrangement would also enable appropriate consolidation and restructuring of operations of MWEL and GWCL with significant reduction in costs and better utilization of the combined resources.

The audited accounts of the companies revealed that as on March 31, 2005 the issued, subscribed and paid-up capital of MWEL was Rs 12 crore divided into 1.20 crore equity shares of Rs 10 each; the issued, subscribed and paid-up capital of MWL was Rs 1.99 crore divided into 19,90,100 equity shares of Rs 10 each; and the paid-up capital of GWCL was Rs 14.65 crore divided into 1,46,50,160 equity shares of Rs 10 each.

In consideration of the transfer of the music world division to GWCL, the GWCL shall issue to each shareholder of MWEL one equity share of GWCL of face value of Rs 10 each for every four equity shares of Rs 10 each held by such member in MWEL. In respect of transfer of MWL, the GWCL shall allot one equity share in GWCL for every 200 shares held by them in MWL.

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