Kesoram Industries Ltd approves demerger of tyre business to Birla Tyres Ltd
As recommended by the Audit Committee of the Board of Directors of Kesoram Industries Limited ('Company') at its meeting held on 4th December, 2018 has approved the demerger of the Company's Tyre Undertaking into Birla Tyres Limited ('Resulting Company'), to be implemented in terms of the Scheme of Arrangement ('Scheme') between the Company, Resulting Company and their respective Shareholders and Creditors under Sections 230 and 232 of the Companies Act, 2013 and other applicable provisions of the Act ('Proposed Demerger').
The Proposed Demerger shall be subject to the approval / sanction of the Scheme by National Company Law Tribunal, Kolkata Bench and such other authorities, as may be necessary.
The Appointed Date for such Demerger will be commencement of business 1st January 2019.
The demerger proposed is part of an ongoing exercise undertaken by Kesoram over the past few months in further realigning and recalibrating operations. The objective has been to transform each business into entities that are market driven in their approach.
For BTL, especially, the proposition and its implementation will open new growth vistas as it looks at opportunities with renewed vigour. The process is expected to act as a stimulant for further investments into BTL. Resultantly, BTL will be benefitted through the
- revitalising of its existing product portfolio range by extension of reach into a much wider spectrum of tyre segments and markets; and
- leveraging of the positive brand image of Birla Tyres and the enormous brand equity of the "Birla" name to take on a rapidly growing yet discerning tyre market.
With the proposed spin-off, Kesoram's focus on the both its Businesses viz. Cement and Tyre will get even further sharpened and pave the way for their robust growth.
Shares of KESORAM INDUSTRIES LTD. was last trading in BSE at Rs.97.2 as compared to the previous close of Rs. 91.6. The total number of shares traded during the day was 461113 in over 5297 trades.
The stock hit an intraday high of Rs. 99.2 and intraday low of 93.25. The net turnover during the day was Rs. 44596745.