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Zandu’s FMCG business to be merged into Emami

22 Jun 2009 Evaluate

In a three-way restructuring plan, Emami Ltd and its listed subsidiary, Zandu Pharmaceutical Works, have proposed to merge Zandu’s FMCG business into Emami, demerge Zandu’s other (non-FMCG) assets and liabilities, including real estate and investments, into a new entity.

 

In the third leg of the restructuring exercise, Emami’s realty business has been proposed to be demerged into a new entity. Existing shareholders of Zandu will receive 14 shares of Emami Ltd of Rs 2 each for every one share of Rs 100 each held in Zandu.

 

Further as a next step under the scheme, Zandu shareholders shall continue to hold shares in Zandu (without FMCG business), to be renamed as Zandu Realty Ltd, of Rs 100 each. Shareholders of Emami will receive one share of Rs 2 each of Emami Infrastructure Ltd, the new realty entity, for every three shares held in Emami Ltd. Both the new entities, Zandu Realty and Emami Ltd will become listed companies as a result of the restructuring

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The proposed scheme would have to be approved by shareholders of the respective companies at separate court-convened meetings. Emami Ltd and five other PACs representing the promoter group hold 72.8 per cent of Zandu’s paid up capital.

 

In February, Zandu Chemicals Ltd (ZCL), a loss-making subsidiary of Zandu, ceased to be a subsidiary as it sold ZCL investments and settled its loans and advances aggregating Rs 93.3 crore out of total outstanding of Rs 109.3 crore and the balance of Rs 1.6 crore were charged to the profit and loss account.

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Peers
Company Name CMP
Sun Pharma Inds. 1654.70
Dr. Reddys Lab 1232.00
Cipla 1229.60
Zydus Lifesciences 915.45
Lupin 2332.70
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