Jain Irrigation to invest $3 million in Mauritius subsidiary, to merge Eurissko Agro Ltd and Orient Vegetexpo Ltd with the company

Jain Irrigation Systems Ltd has announced that the Board of Directors of the Company at its meeting held on August 30, 2006, has decided to approve investment of a sum of $ 3 million in the capital of the wholly owned subsidiary in Mauritius which in turn will further invest the amount in capital of the US subsidiary to repay high cost debt of the 2nd generation said US subsidiary. The Notice and Explanatory Statement for the 19th AGM to be held on September 29, 2006 was also finalised. The AGM notice includes amendments to clauses of Articles of Association of the Company to delete governance clauses incorporated at the time of induction of the two private equity investors.

The Board also discussed the strategy related to consolidated of capacities in Vegetable dehydration business at Jalgaon and Vadodara plants of the Company, including an "In-principle" approval to merge Eurissko Agro Ltd and Orient Vegetexpo Ltd with April 01, 2006 as appointed date into the Company subject to valuation and other terms. The vegetable dehydration business contributes 6-8% of the revenues of the Company at present. The merger would provide operational, fiscal, strategic benefits at economically attractive valuation to the Company´s shareholders.

The Board also constituted a Board Sub-Committee to finalize the Scheme and other terms of the mergers.

The Board Sub-Committee meeting was held on September 01, 2006 to finalise valuation and share swap ratio for the merger of Eurissko Agro Ltd (EAL) with the Company. The share swap ratio has been fixed at 2 shares of the Company for every 49 shares held by the shareholders of the said EAL. The valuation and share swap ratio for the merger of Orient Vegetexpo Ltd (OVL) with the Company and ratio has been fixed at 7 shares of the Company for every 53 shares held by the shareholders of the said OVL.

Source : Equity Bulls

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