GMR - Demerger of Ferro Alloys & merger of Bharat Sugar Mills

Source: MoneyControl.com

With a view to focus on our core competency in sugar and related businesses, the Board of Directors of GMR Industries Ltd , the manufacturing arm of GMR Group, in their meeting held on 12th August 2006 has decided , subject to approvals from Shareholders, Stock Exchanges and High Court of Andhra Pradesh and other authorities as may be required, to hive of the Ferro Alloys Division to a separate company GMR Ferro Alloys and Industries Ltd such that the shareholders of the GMR Industries Ltd would be holding shares in the new company in the same ratio as they hold in GMR Industries Ltd.

Every preference shareholder holding 100 shares in GMR Industries Ltd would be getting 38 preference shares in the new company (GMR Ferro Alloys and Industries Ltd) and 62 new preference shares in GMR Industries Ltd in cancellation of their existing 100 preference shares in GMR Industries Ltd. Every equity shareholder holding 100 shares in GMR Industries Ltd would be getting 38 equity shares in the new company (GMR Ferro Alloys and Industries Ltd) and 62 new equity shares in GMR Industries Ltd in cancellation of their existing 100 equity shares in GMR Industries Ltd. All the assets and liabilities pertaining to Ferro Division would be transferred to the new company at book values. The effective date of demerger is 1April, 2006 and in accordance with Section 2(19AA) of the Income Tax Act 1961 and Section 391 to 394 of the Companies Act 1956.

The Board of Directors of GMR Industries has also decided to merge Bharat Sugar Mills Ltd (BSM) registered in Karnataka with itself. BSM is currently a subsidiary of GMR Industries Ltd and is implementing a project for construction of an Integrated Sugar Complex with 3500 Tonnes Crushing per day (TCD) expandable to 5000 TCD , Cogen with 24MW and 45 KLD of Distillery at a cost of Rs. 274 Crores. The registered office is being shifted to the State of Andhra Pradesh. The effective date of merger is 1 April, 2006 and in accordance with Section 391 to 394 of the Companies Act 1956 and other applicable statutes.