JK Paper announces a scheme of arrangement to consolidate its business operations

The Board of Directors of JK Paper Ltd ("JKPL"), one of India's largest Paper and Packaging Solutions Companies, in it's meeting held today approved a Composite Scheme of Arrangement ("Scheme") of, inter alia, JK Paper Ltd and Horizon Packs Private Ltd, Securipax Packaging Private Ltd, JKPL Utility Packaging Solutions Private Ltd which are wholly owned subsidiaries ("WOS") of JKPL and Enviro Tech Ventures Ltd.

As a part of the Scheme, the three WOS of JKPL engaged in manufacturing of packaging products and solutions will be merged with JKPL to create a consolidated paper and packaging company. Further, pursuant to the Scheme, The Sirpur Paper Mills Ltd will become a direct subsidiary of JKPL.

The Scheme is subject to the receipt of requisite approvals from the Stock Exchanges, Securities and Exchange Board of India, the National Company Law Tribunal (NCLT), other statutory and regulatory authorities under applicable laws, respective Companies' shareholders and creditors. The transaction is expected to be completed in 12 months subject to regulatory approvals.

Separately, the Board also approved the acquisition of majority stake in Radhesham Wellpack Private Limited (RWPL) in today's meeting. JKPL entered into a Share Purchase and Shareholders' Agreement (SPSHA) for the acquisition of 60% shares of RWPL upfront and the balance 40% to be acquired within a period of two years as per the SPSHA.

RWPL is engaged in the business of manufacture of corrugated boxes, corrugated sheets, and other corrugated packaging related work/ products. Corrugated Packaging is a rapidly growing segment in the Indian Paper & Packaging industry driven by growth in end-use industries.

Speaking on the occasion, Mr. Harsh Pati Singhania, Chairman and Managing Director, JK Paper Ltd said, "The Composite Scheme of Arrangement approved by the Board would result in the consolidation of Paper and Packaging Businesses and streamline the corporate structure bringing in efficiencies in operations, processes, and ease of compliances. This will also help us serve our customers better.

The acquisition of RWPL is in line with the long-term strategic objective of the Company in the Packaging business and gives us an opportunity to have a greater footprint in the western region".

Shares of JK Paper Limited was last trading in BSE at Rs. 455.05 as compared to the previous close of Rs. 466.85. The total number of shares traded during the day was 16142 in over 772 trades.

The stock hit an intraday high of Rs. 469.95 and intraday low of 452.95. The net turnover during the day was Rs. 7393440.00.

Source : Equity Bulls

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