Larsen & Toubro
said in the filing on Monday that the board has given approval for the Scheme of Amalgamation of LTSB with the company.
This Scheme of Amalgamation is presented under Sections 230-232 and other relevant provisions of the Companies Act, 2013 as an integrated and complete Scheme of Amalgamation between L&T Shipbuilding Limited, the Transferor Company and Larsen & Toubro Limited, the Transferee Company and the dissolution of the Transferor Company without winding up. The Scheme is in the interest of the Transferor and Transferee Companies, their respective shareholders and creditors.
The proposed merger hence can facilitate utilization of the shipyard facility in an optimum manner by leveraging superior pre-qualification and financial capability of the Transferee Company and by also achieving better execution through a pooling of human capital with diverse skills, talent and vast experience.
There has been confusion among customers in understanding the legal status of the Transferor Company and the Transferee Company during prequalification and while awarding contracts. Competition has also been leveraging Transferor Company financials for negative propaganda, despite Transferee Company's strong balance sheet, the company said in the press note.
The proposed merger provides an opportunity to optimize the utilization of the Transferor Company's facilities (including Kattupalli Shipyard) for businesses other than those presently carried on by the Transferor Company.
The amalgamation will improve organizational capability arising from the pooling of human capital that has diverse skills, talent and vast experience, the company said.
Also, the proposed amalgamation would be beneficial from a revenue generation and cost optimization perspective as the Transferee Company would continue to reap the benefits of qualifications/certifications of the Transferor Company post-amalgamation, it added.