Shrachi Infrastructure Finance Ltd to merge with Magma Leasing Ltd

Magma Leasing Ltd has announced that the Board of Directors of the Company at its meeting held on August 25, 2006 in pursuance of growth opportunities has discussed a proposal for Amalgamation of Shrachi Infrastructure Finance Ltd (Shrachi), Kolkata with the Company.

The salient features of the proposal as approved by the Board, subject to all regulatory and statutory approvals are:

- Shrachi will be amalgamated into the Company with effect from April 01, 2006.

- The shareholders of Shrachi will be allotted Equity Shares of the Company in the ratio of 1 fully paid-up Equity Share of Rs 10/- each of the Company for every 3 fully paid-up Equity Shares of Rs 10/-each of Shrachi.

- The promoters and promoter group Companies of Shrachi will be entitled to a non-compete fee as consideration for not competing with the business of the merged entity for a period of 6 years, which fee is to be discharged by an additional allotment of 329,000 Equity Shares of the Company.

- A Committee of the Board of Directors of the Company has been set up to finalise the Scheme of Amalgamation in conformity with the above terms or any appropriate modifications that may be required subject to various legal and regulatory requirements and in consultation with the promoters of Shrachi.

- Mr S K Todi and Mr Ravi Todi, presently Chairman and Managing Director respectively of Shrachi will join the Board of the Company.

- The proposed amalgamation will result in the merged entity having an asset base of over Rs 46,000 million, a customer base of 150,000, a network of 146 branches across India with strong penetration in rural and semi-urban areas, consequently enabling increased business from financing assets and offering fee based products.

Source : Equity Bulls

Keywords