Kamdhenu spurts 4% over scheme of amalgamation

The Scheme of Arrangement further provides for the de-merger of the Paint Business of Kamdhenu Ltd into Kamdhenu Colour and Coatings Ltd. The Steel Business will remain in Kamdhenu Limited.

Mar 16, 2021 09:03 IST India Infoline News Service

Kamdhenu
Kamdhenu Limited updated the exchanges that the Scheme of Arrangement provides for amalgamation of Kamdhenu Concast Ltd, Kamdhenu Overseas Ltd, Kamdhenu Paint Industries Ltd, Kamdhenu Infradevelopers Ltd, Kamdhenu Nutrients Pvt Ltd, Kay2 Steel Ltd and Tiptop Promoters Pvt Ltd (Transferor Companies) with Kamdhenu Limited (Transferee Company).

The company stock was bullish during early trade on Tuesday. Each stock was trading at Rs144.05 per piece up Rs5.10 or 3.67% on the BSE. It hit a day's high of Rs 146.40 per piece early on near 52-week high of Rs149 per piece.

In consideration of the amalgamation, the shareholders of the Transferor Companies would be issued Equity Shares in the Transferee Company, further, there would be no change in the aggregate Equity Shareholding of the Transferee Company.

In respect of the certain remaining assets of the Transferor Companies, the shareholders of the Transferor Companies would be issued Non-cumulative Compulsory Redeemable Preference Shares (“CRPS”) in the Transferee Company/ Kamdhenu Ventures Ltd.

The rationale for the proposed amalgamation
  • Simplify and streamline the promoter shareholding structure across multiple Companies.
  • Will enable to remove of multiple layers of the holding companies in tune with the Government policy
  • Result in significant reduction in multiplicity of legal and regulatory compliances which at present is required to be made separately by the Transferor Companies and the Transferee Company,” company shared rationale for proposed amalgamation.

Demerger of paint business
The Scheme of Arrangement further provides for De-merger of Paint Business of Kamdhenu Ltd into Kamdhenu Colour and Coatings Ltd. The Steel Business will remain in Kamdhenu Limited.

Kamdhenu Colour and Coatings Ltd ("KCCL”) is a Wholly Owned subsidiary of Kamdhenu Ventures Ltd (KVL), presently KVL is a Wholly Owned Subsidiary of Kamdhenu Limited. KVL will be listed on both the Stock Exchanges i.e. NSE & BSE, KVL will issue 1 (one) Equity Share of Rs5 each, credited as fully paid-up, to the shareholders of the Kamdhenu Limited for every one Equity Share of Rs10 each in the Kamdhenu Ltd as on record date.

Post Demerger and Listing of KVL, both the entities i.e. Kamdhenu Limited and Kamdhenu Ventures Ltd will become independent in their respective business of Steel and Paint.

Upon Scheme become effective, the Kamdhenu Ventures Ltd will have 100% mirror Equity Shareholding as that of Kamdhenu Limited.

Rationale for Proposed Demerger:
  • Better management focus & operational flexibility and facilitate businesses to independently pursue their growth plans through organic / inorganic means;
  • Enable both companies to raise necessary funds, invite strategic investors, employ specialized manpower, etc., thereby creating a platform to pursue next level of growth;
  • Strengthen, consolidate and stabilize the business of these companies and facilitate further expansion and growth of their respective businesses;
  • Facilitate administrative convenience, ensure optimum utilization of various resources and result in significant operational efficiencies; and
  • Aimed at maximising shareholder value providing them an opportunity to participate in the business of their choice based on their risk-reward profile.
The Scheme of Arrangement and Listing of Kamdhenu Ventures Ltd are expected to be completed within FY22.

Related Story

Open Free Demat Account (Rs699)