Blue Star proposes to transfer its Professional Electronics and Industrial Systems business (PE&IS) undertaking to its wholly owned subsidiary, Blue Star Engineering & Electronics (formerly known as Blue Star Electro-Mechanical), on a going concern basis, at fair value, for a lump sum consideration of Rs 110.50 crore. Blue Star Engineering & Electronics will discharge the consideration for the said transfer by issue and allotment of fully paid up equity shares to the company.
Towards this purpose, the company has, on March 13, 2015, executed a Business Purchase Agreement (BPA), in accordance with the approval of the Board of Directors dated January 21, 2015 and the members dated March 11, 2015, for transfer of its PE&IS undertaking. The shareholders of the company have approved the transfer of PE&IS undertaking. The transfer of the PE&IS undertaking shall be completed after the conditions precedent under the BPA have been satisfied.
PE&IS business model is distinct and differentiated as compared with the core air conditioning and refrigeration business of the company. Strategically, this business is expected to scale up and grow faster once it gets an independent identity. The turnover of the PE&IS business of the company for financial year 2013 - 14 has been approximately Rs 122 crore. For the financial year 2013 - 14, the turnover attributable to the PE&IS business was 4.40% of the turnover of the company as a whole.