Sundaram Multi Pap to acquire Sihora Paper Mills, Vidarbha Paper Mills

Sundaram Multi Pap Ltd has announced that the Board of Directors of the Company at its meeting held on May 12, 2007 has considered the following:

1. The Board of Directors has consented for the acquisition of Two Paper Mills through Amalgamation, namely M/s. Sihora Paper Mills Ltd, Nagpur and M/s. Vidarbha Paper Mills Ltd, Nagpur, Maharashtra.

M/s. Vidarbha Paper Mills Ltd has a capacity of 21,000 TPA of Printing Paper manufacturing capacity and M/s. Sihora Paper Mills Ltd has a capacity of 4800 TPA capacity of Printing, Writing & Packaging Paper Capacity, which is further getting scaled up currently.

2. The Board of Directors has consented for a total valuation of Rs 60 crores for the acquisition of these two Companies through amalgamation.

3. Accordingly the Board also gave consent for the Amalgamation Swap ratio of 1 share of M/s. Sundaram Multi Pap Ltd of Rs 1 Paid Up for every 6.665 shares of M/s. Sihora Paper Mills Ltd and M/s. Vidarbha Paper Mills Ltd (Rs 1 Paid Up) each.

4. The Board of Directors took on note that the Above acquisitions will add greater strength to the Company from the perspective that they provide a back bone support for the Branded Note Book Business in which the Company is in and also with captive capacities now adding under backward integration, the Company will be in a position to save upto Rs 5 crores and to that extent improve its net margins going forward.

Source : Equity Bulls

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