Two listed entities to become one
Empee Distilleries’ shareholders approved a restructuring of group companies that will see the sugar business under Empee Sugars and Chemicals become a wholly-owned subsidiary of Empee Distilleries.
Following the merger, Empee Distilleries will be the sole listed entity. The objective is to bring the sugar business with its distilleries , under the umbrella of the group’s strongest business which is production of Indian Made Foreign Liquor.
The stronger balance-sheet of Empee Distilleries will benefit the sugar business.
Addressing shareholders, the group’s chairman, M.P. Purushothaman said, the arrangement involving Empee Sugars and Chemicals, Empee Distilleries and Appollo Wind Energy Private Ltd, provides for the sugar company to be integrated with Empee Distilleries which now holds a 63 per cent stake in Empee Sugars.
Empee Sugars’ sugar units in Tamil Nadu and Andhra Pradesh will be demerged to become a part of Appollo Wind, which will be renamed Empee Sugars and Chemicals effective April 1, 2012.
Essentially, this will integrate Empee Distilleries’ liquor business and the industrial alcohol production of the sugar business. The sugar business will be ‘ringfenced’ for the management to address its issues. In the Tamil Nadu unit the company is facing a shortage of sugarcane.
The capital restructuring of the balance-sheet will see shareholders get one new Empee Sugars share for every two cancelled in the scheme of arrangement.
The reduced capital will be adjusted against the profit and loss account.
The merger of Empee Distilleries and Empee Sugars will be effective from April 1, 2011, with shareholders getting four shares in Empee Sugars for every share in Empee Distilleries following the merger.
Mr Purushothaman said Empee Group plans to set up four grain-based distilleries in the Southern States to source high quality alcohol for international standards of liquor. The first of these, a 60 kilolitre a day unit, will soon commence production in Andhra Pradesh.