The Hindu Business Line : GMR to demerge ferro alloys, merge Bharat Sugar with itself

The board of directors of GMR Industries Ltd has decided to demerge its ferro alloys division into a separate company - GMR Ferro Alloys & Industries Ltd. The board has also decided to merge Bharat Sugar Mills Ltd (BSML), a subsidiary, with the company.

GMR Industries has informed the stock exchanges that the board decisions are subject to approvals from the shareholders, stock exchanges, High Court and other authorities as may be required.

Deloitte Haskins and Sells (DHS) has taken up the valuation exercise and the GMR Industries board on Saturday approved the adoption of the valuation report.

This now forms the basis for issue of shares to the members of the de-merged company (GMR Ferro Alloys & Industries Ltd) in exchange for the transfer of the demerged undertaking under the scheme of arrangement.

Consequently, every equity shareholder holding 100 equity shares in the company would be getting 38 equity shares in GMR Ferro Alloys & Industries Ltd and 62 new equity shares from the company in cancellation of their existing 100 equity shares in the company.

Similarly, every preference shareholder holding 100 preference shares would be getting 38 preference shares in GMR Ferro Alloys & Industries Ltd and 62 new preference shares.

All the assets and liabilities pertaining to ferro division would be transferred to the new company at book values and in accordance with Section 2(19AA) of the Income-Tax Act 1961 and Sections 391 to 394 of the Companies Act 1956. The appointed date of de-merger is April 1, 2006.

Bharat Sugar Mills is currently implementing a project for construction of an integrated sugar complex with 3,500 tonnes crushing per day (TCD) expandable to 5,000 TCD, cogeneration power plant with 24 MW and 45 KLD of distillery plant at a cost of Rs 274-crore. The appointed date of merger is April 1, 2006.

The board has also appointed Mr R. Ramakrishnan as a Joint Managing Director, Mr T.C.S. Reddy as a Director (Technical) and Mr K. Uday M. Chitale as an additional Director from August 12.

Meanwhile, the company said, Mr M. Sudhakara Rao has resigned from the board and ceased to be a Director from August 12.

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