The Hindu Business Line : Precot Mills to seek nod for group co merger

A meeting of the shareholders of Precot Mills Ltd (Precot) and that of its group company Meridian Industries Ltd, which have decided to merge, will be held here on June 9.

The meeting has been called to get the approval of the respective shareholders of the two companies for the proposed merger.

According to Precot Mills sources, the meeting has been convened on the directions of the Madras High Court.

The board of directors of the two entities took the merger decision in March and would complete the merger formalities once the requisite approval of the shareholders is obtained. The merger will take effect from April 1, 2006.

Precot, a listed company with the NSE, has been given no objection by the stock exchange for the proposed merger with Meridian Industries, an unlisted and profit making group company.

As per the swap ratio approved by the companies, the shareholders of Meridian will be allotted one share of Precot for every two shares of Meridian Industries.

The merger proposal has been chalked out as part of capacity consolidation plans of Precot, which is set to implement a Rs 140-crore expansion programme for the manufacturing facilities under the merged entity.

The company which has proposed to import a complete spinning plant of 32,256 spindles from the Philippines is expected to have its installed spindle capacity raised to about two lakh from the present 1.6 lakh spindles by January next when the imported spinning plant is expected to start operation.

The sales turnover of the merged company, Precot Meridian Ltd, is expected to go up to Rs 400 crore in the financial year 2007-08.

More Stories on : Mergers & Acquisitions | Textiles

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page