The Telegraph
Since 1st March, 1999
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JK fixes 2:5 swap ratio for Vikrant merger

New Delhi, Oct. 7 (PTI): In a major business restructuring exercise, the board of directors of JK Industries today decided to merge its subsidiary Vikrant Tyres with JK Tyre, its residual undertaking.

The merger would be made at a swap ratio of 2:5 which means the shareholders of Vikrant Tyres would receive two shares of Rs 10 each of JKI for every five shares of Rs 10 each held by them.

The board also decided to demerge its sugar and agri-genetics businesses into independent companies. While it decided to issue 15 equity shares of Rs 10 each in the sugar company to every member of JKI holding 100 equity shares of Rs 10 each for the demerger of the sugar business, one equity share of Rs 10 each in the agri-genetics company would be issued to every JKI shareholder holding 10 equity shares of Rs 10 each in the demerger of the agri-genetics unit, a company release said.

JKI’s equity share capital would stand reduced from Rs 34.56 crore to Rs 25.92 crore following the demerger. The new tyre making entity, which would emerge after the merger of JK Tyres and Vikrant Tyres, is likely to further consolidate JK Tyre’s position as a leading four-wheeler tyre maker and exporter having a 20 per cent market share.

The board’s proposals would, however, be subject to the necessary approvals of financial institutions, banks and shareholders of both JKI and Vikrant Tyres.

Announcing the restructuring, JK Industries chairman H. S. Singhania said: “As a combined entity, we are looking towards a bright future with even higher levels of growth and market share”. He expected JK Tyres to significantly improve its bottomline after the merger.

Regarding the sugar unit, the release said that “this business is expected to report improved results and is a part of our effort to stay in what is a profitable part of India’s agri-based industry.”

Similarly, agri-genetics has been designated as a high growth area for the country’s future and was expected to become one of the most profitable areas. “This demerger shall provide the necessary flexibility for strategic alliances and acquisitions,” JKI said.

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