Amforge Industries Chakan unit demerged and merged with Mahindra Automotive Steels Ltd

Amforge Industries Ltd has announced that pursuant to the Order dated March 21, 2006 passed by the Bombay High Court sanctioning the Composite Scheme of Arrangement with Mahindra Automotive Steels Ltd (MASL), the Chakan unit of the Company was demerged and merged with MASL, as a going concern, together with all the assets and liabilities relating to the Chakan unit duly stood transferred to and vested in MASL with effect from April 01, 2005. In view of the demerger, the Company does not now undertake activity in relation to forgings of the nature used to be undertaken by it at the Chakan Unit such as forged articles relatable to four wheelers and articles heavier in weight. The Company is however, still carrying out manufacture of certain types of forgings of small parts and those in relation to two wheel vehicles and for specific use of other industries.

In view of the demerger, the Company and its promoters have agreed and entered into non compete agreement in relation to forging parts / components in all forms (raw, semi finished, machined, etc) used in automobiles, other than two wheel vehicles and certain specific parts which are presently manufactured by the Company at its facilities.

The non compete is for 7 years and consideration paid is Rs 2 Crores to the Company and Rs 3 Crores to the Promoters.

Source : Equity Bulls

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