Modipon to sell chemical business, to sell investments

Modipon Ltd has announced that the Board of Directors of the Company at its meeting held on October 28, 2006, has considered and approved, subject to the approval of the IFCI Ltd and the shareholders of the Company, as per provisions of Section 192A and 293(1)(a) and other applicable provisions of the Companies Act, 1956, and such other approvals as may be required to sell and transfer the whole of the undertaking of the Company pertaining to the Chemical Business, as a going concern on slump sale basis, along with certain other specified assets in particular the investments by the Company in the shares of Quick Investment (India) Ltd and Good Investment (India) Ltd, the wholly owned subsidiaries of the Company to Indofil Organic Industries Ltd (IOIL) and the shares of Godfrey Phillips India Ltd held by the Company or its subsidiaries to IOIL with effect from October 01, 2006, for a total consideration of Rs 124.66 crores.

The consideration shall be discharged partly in cash, partly by taking over the liabilities of Modipon Fibres Company (MFC), the Fibres Division of the Company and partly being applied by the Company for subscription on behalf of the shareholders of the Company for shares of IOIL to be allotted and distributed by IOIL directly to the Equity Shareholders of the Company in the ratio of 3 Equity Shares of IOIL for every 2 Equity Shares held in the Company.

Thus the above is subject to approval of the IFCI Ltd and the shareholders of the Company by way of a resolution under section 293(1)(a) of the Companies Act, 1956.

Source : Equity Bulls

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