Comments
The two K K Birla group entities -- Oudh Sugar Mills Ltd (OSML) and Upper Ganges Sugar Industries Ltd (UGSIL) – have informed stock exchanges that various businesses of the group have been proposed to be restructured.
The two companies said that their respective Boards on Friday approved two separate schemes of arrangements for the proposed restructuring exercise. The schemes would undergo Allahabad High Court approved processes.
The group companies, now controlled by Nopany family and led by Nandini Nopany, late K K Birla’s daughter, also said that the aim of the restructuring was to consolidate (geography-specific) sugar units of the group, located in two States Uttar Pradesh and Bihar under two different listed entities. Currently, both OSML and UGSIL have sugar units in two States.
The other existing businesses of the group, such as tea plantation and investments, would also change their umbrella entities.
Sugar businesses
Oudh Sugar said it proposed demerger of food processing and investments businesses to Palash Securities, another group entity. The share swap ratio has been fixed at 27 shares of Palash Securities for every 70 equity shares Oudh Sugar. Post demerger, the shareholding of Palash Securities would reflect mirror image of the shareholding of Oudh Sugar.
The company further announced proposal for transfer of food processing business undertaking from Palash Securities to its 100 per cent subsidiary Allahabad Canning. It also proposed transfer of Bihar Sugar business undertaking of Oudh Sugar to its 100 per cent subsidiary Vaishali Sugar.
It also planned merger of Vaishli Sugar with Magadh Sugar at swap ratio of 276 shares of Magadh Sugar for 13 shares of Vaishali Sugar. The proposed swap ratio for Upper Ganges as a compensation for its Bihar Sugar assets would be 88 shares of Magadh Sugar for every 113 shares of Upper Ganges.
The restructuring also entails proposal for consolidation of Uttar Pradesh sugar businesses of both Oudh Sugar and Upper Ganges Sugar into Avadh Sugar (share swap ratio – two Avadh Sugar for every 9 equity shares of Oudh Sugar). The Upper Ganges shareholders would get 11 shares of Avadh Sugar for 30 held.
Tea business
Upper Ganges, on the other hand, proposed to demerge tea and investment businesses to Ganges Securities. Existing shareholders of Upper Ganges would get 77 shares of Ganges Securities for 89 shares held.
It also proposed to transfer of tea business from Ganges Securities to its 100 per cent subsidiary Cinnatolliah Tea.
The group had appointed chartered accounting firm Walker Chandiok & Co LLP as its business assets valuer. The group also obtained fairness opinion report from merchant banker Corporate Professionals Capital Pvt Ltd.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.