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Mumbai-based chemicals manufacturer Indo Amines has received board approval for the proposed merger of Core Chemicals (Mumbai) Pvt Ltd with its wholly-owned subsidiary Key Organics Pvt Ltd. The scheme is subject to NCLT and other regulatory approvals.
Core Chemicals is another Mumbai-headquartered chemical manufacturer. The merger does not involve any cash consideration.
Shareholders of Core Chemicals will be issued 50 shares of Rs 10 each of Indo Amines for every share held in CCMPL. There will be no issue and allotment of equity shares of Indo Amines to the shareholders of Key Organics, since it is a subsidiary of Indo Amines, the company informed the stock exchange in a statement.
Post completion of merger, promoter’s shareholding in Indo Amines is expected to fall to 70.06 per cent from the earlier 74.26 per cent.
“The amalgamation will strengthen our position, significantly expand our product offerings and sales platform to access a much larger client base and allow for a pooling of resources and know-how,” Vijay Palkar, Managing Director and CEO, Indo Amines, said.
“We believe that this will act as a strong platform from which we can embark on the next phase of our growth and unlock significant value for the shareholders. We are convinced that one strong entity, organisation and management will increase long-term value for all stakeholders,” he added.
Indo Amines will also benefit from environment clearance and permission to produce an additional quantity of surfactants and emulsifiers per annum. The merger will further help Indo Amines to build a strong asset base, improve revenues and product range, apart from providing it operational synergies and efficiencies.
It will also help in lowering the cost of capital. Indo Amines will use Core Chemicals’ present approvals (of agro surfactants & emulsifiers) with MNCs present in India to export these products globally. At 1.56 pm, Indo Amines’ share prices were trading up 1.43 per cent at Rs 117 on the BSE.
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