The board of directors of Exide Industries, on Tuesday, approved the scheme of amalgamation of wholly owned subsidiary Chloride Power Systems and Solutions with the parent company.

The scheme is subject to the receipt of approval from the requisite majority of shareholders and creditors of the amalgamating parties (unless dispensed with), approval by the Kolkata Bench of the NCLT having jurisdiction over the amalgamating companies, and such other approvals, permissions and sanctions of regulatory and other statutory authorities / quasi-judicial authorities, as may be necessary, the company said in a filing with stock exchanges.

Chloride Power Systems is engaged in the business of offering complete DC power solutions for industrial customers by manufacturing industrial battery chargers, DC power solutions and solar power systems in India. It presently manufactures battery chargers, distribution boards, transformers, chokes, printed circuit board and battery health monitoring system. While Exide is engaged in the business of manufacture and sale of lead acid storage batteries and home UPS of diverse brands.  

Rationale behind merger

Explaining the rationale behind the amalgamation, it said that the financial, managerial and technical resources, personnel, capabilities, skills, expertise, assets and technologies of each of the amalgamating companies pooled in the merged entity, will lead to optimum use of infrastructure, cost reduction and efficiencies, productivity gains and logistic advantages and reduction of administrative and operational costs, thereby significantly contributing to the future growth and maximising shareholder value.

As the scheme contemplates amalgamation of a wholly owned subsidiary with its holding company, it would result into only cancellation of shares of the transferor company (Chloride Power Systems) without any consequential issuance of fresh shares by the transferee company (Exide) or payment of any cash consideration.

comment COMMENT NOW