Sundaram Clayton shareholders to receive WABCO-TVS Ltd shares

Sundaram Clayton Ltd has announced that the Board of Directors of the Company at its meeting held on May 14, 2007, has approved the Scheme of arrangement between the Company and its wholly owned subsidiary, WABCO-TVS (India) Ltd and their respective shareholders and creditors, subject to all requisite or necessary approvals / sanctions including under and in accordance with Sections 391-394 of the Companies Act, 1956.

The salient features of the Scheme of arrangement approved by the Board subject to the aforesaid approvals and sanctions are as follows:

1. All assets and liabilities together with all duties, rights and obligations in relation to the Brake business as on January 01, 2007 (the Appointed date) will be transferred to and vested in favour of the wholly owned subsidiary, namely WABCO-TVS (India) Ltd ("Resulting Company") and together with any accretion or deletion to the said assets and any addition / deduction to the liabilities between the Appointed date and Effective date as defined under the Scheme.

2. Similarly, Non-brakes business with all its assets, liabilities, duties, rights and obligations pertaining thereto, together with investments will continue to remain with the existing Company, namely Sundaram-Clayton Ltd ("Demerged Company").

3. As an integral part of the Scheme, share capital of the Demerged company and the Resulting Company will be reorganized by distributing the paid up equity share capital equally between the two Companies. The face value of each equity share in the Demerged Company will be reduced from Rs 10/- each to Rs 5/- each.

4. It is also proposed to issue and allot one equity share of Rs 5/- each fully paid up in the Resulting Company for every equity share of Rs 5/- each (after reorganization) held in the Demerged Company on a record date to be fixed for the purpose upon the Scheme coming into effect.

5. It is proposed to effect an inter se transfer of shares between the Promoters namely TVS group and Clayton Dewandre Holdings Ltd (CDH), belonging to the WABCO Group, within two years from the date of listing of the equity shares of the Resulting Company.

6. Consequently, majority control and management of the Resulting Company will vest with CDH after CDH acquires majority shareholding in the Resulting Company.

7. Similarly, majority control and management of the Demerged Company will vest with TVS Group after TVS Group acquires majority shareholding in the Demerged Company.

8. The proposed arrangement is to ensure that CDH and TVS Group are enabled to concentrate their resources on, and focus management upon the business of their respective areas of interest for future growth, namely CDH on the Brakes business and the TVS Group on the Non-brakes business.

9. The Scheme is conditional upon securing the approval of the Stock Exchanges, Shareholders, Creditors and the Hon'ble High Court of Madras.

Source : Equity Bulls

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