Astral acquires 51% stake in Gem Paints for Rs 194 cr

22 Jun 2022 , 09:21 AM

Astral has appointed majority directors on the board of Gem Paints and Esha Paints and control is established in terms of the aforesaid debenture subscription agreement. Accordingly, Gem Paints and Esha Paints have become subsidiary and step down subsidiary of the company respectively in terms the applicable provisions of the Companies Act 2013. Earlier on 29th April, Astrals board approved acquisition of 51% controlling equity stake in operating paint business of Gem Paints. Astral shall initially invest Rs 194 crore in Gem Paints by subscribing to OCDs equivalent to value of 51% equity stake of operating paint business of Gem Paints. The operating paint business of Gem Paints is proposed to be demerged to a wholly owned subsidiary of Gem Paints viz. Esha Paints. Upon the completion of demerger, Astral will acquire 51% equity shares of Esha Paints against the redemption of OCDs. The name of Esha Paints is proposed to be changed to Gem Paints under the demerger scheme. The balance 49% equity stake will be acquired by Astral over a period of 5 years in tranches as per the share purchase agreement entered between the parties. Astral is engaged in the business of manufacturing and trading of pipes, fittings and adhesive solutions. The company reported a 19% decline in consolidated net profit to Rs 141.10 crore despite of a 23.3% rise in net sales to Rs 1,390.60 crore in Q4 FY22 over Q4 FY21. Shares of Astral were down 1.46% to Rs 1661.40 on the BSE. Powered by Capital Market – Live News