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— Paul Noronha

(From Left) Mr A.P. Chen, CFO and Executive VP, D-Link Corporation, with Mr K.R. Naik, Executive Chairman, D-Link (India) Ltd and Mr Jangoo Dalal, Managing Director

Our Bureau

Mumbai, Oct. 6 Communications equipment major D-Link (India) said on Monday that the company would be de-merged into two entities, as part of a restructuring programme.

D-Link’s businesses related to structured cabling systems, R&D, manufacturing and service operations will be consolidated in a separate company, called Smartlink Network Systems. On the other hand, D-Link India will be the name of the company managing the business related to the sales and marketing of D-Link’s branded active networking products.

As part of the de-merger process, each shareholder of D-Link (India) Ltd will receive one equity share (of face value Rs.2) in Smartlink Network Systems Ltd for each equity share (of face value Rs 2) presently held in the company.

Post the de-merger exercise, the shares of Smartlink shall be listed on the Bombay Stock Exchange and the National Stock Exchange, according to Mr Jangoo Dalal, CEO & Managing Director, D-Link. “We believe that the de-merger will result in focused business operations for the two companies and allow them increased flexibility in taking advantage of the huge growth opportunities in their respective business segments,” Mr Dalal, said.

As per data available on the bourses, D-Link Corporation (through D-Link Mauritius Holding Inc) holds about 36.32 per cent stake in D-Link while Mr KR Naik, the executive Chairman of D-Link (India), has a 26 per cent holding.

As part of the de-merger, there will be a share swap arrangement between Mr Naik and D-Link Corporation, such that Mr Naik will have a 62 per cent stake in Smartlink. In D-Link India (post the de-merger), D-link Corporation (Taiwan) will have a 60 per cent stake, while Mr Naik will hold two per cent.

The de-merger process is expected to be completed in six to eight months. Of the 700 people currently working with company, 580 would be transferred to Smartlink, while 120 would be with D-Link India. The company is yet to take a call on who will be at the helm of affairs at the two companies.

More Stories on : Restructuring | Hardware

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