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Stock Report
Kojam Fininvest to be merged with Gujarat Glass Pvt Ltd
Posted On : 2007-02-01 11:47:45( TIMEZONE : IST )
Kojam Fininvest Ltd has announced that the Board of Directors of the Company at its meeting held on January 31, 2007 has considered and approved a Scheme of Arrangement and Amalgamation u/s 391 to 394 of the Companies Act, 1956. The Scheme envisages merger of the Company into Gujarat Glass Pvt Ltd (‘GGL’) which is an unlisted subsidiary of the Company.
GGL is engaged in the business of manufacturing Glass Containers. The Company holds 53.86% of the equity share capital of GGL. Apart from investment in GGL, the Company does not have a substantial asset base.
Consolidation would result in the following synergies:
- enable the shareholders of the Company to participate directly in the fortunes of GGL instead of through the Company as at present.
- result in reduction of the administrative costs.
- result in saving in dividend distribution tax.
The valuers (M/s. Dalal and Shah, Chartered Accountant) have recommended the Share Exchange Ratio of 0.9317 share of Rs 10/- of GGL for every 1 share of Rs 10/- held in the Company. GGL’s shares held by the Company will get cancelled on the Scheme becoming effective and the same number of shares to be distributed to the shareholder of the Company.
However for the sake of administrative convenience and in interest of the public shareholders of the Company, Board has approved the ratio of 1 equity share of Rs 10/- of GGL for 1 equity share of Rs 10/- held in the Company (i.e 1 for 1). Consequently share capital of GGL shall stand increased from Rs 17.30 crores to Rs 17.98 crores. RSM Advisory Services Pte Ltd are the advisors to the restructuring exercise.
The salient features of the Scheme are as under:
- Appointed Date is fixed as April 01, 2007.
- GGL to issue shares to shareholders of the Company in consideration for merger in the ratio as stated above. The Company shares will get delisted and GGL shares will be listed.
- On the Scheme becoming effective, the Investment in GGL as appearing in the books of accounts of the Company shall stand cancelled.
- With effect from the Appointed Date, all assets and liabilities of the Company shall be vested in and transferred to GGL.
The Scheme is subject to requisite consents and approvals of the concerned authorities. The Scheme has also been approved by the Board of Directors of GGL.
