Mumbai, June 13: In a unique restructuring exercise, Nicholas Piramal India Ltd (NPIL) is transferring its 53.8 per cent holding in subsidiary, Gujarat Glass Pvt Ltd (GGPL), to NPIL’s shareholders through a new holding company (NHC).

The shares of the new company would be offered free of cost to the shareholders of NPIL in proportion to their shareholding in Nicholas Piramal. NPIL shareholders will get one NHC share for every four shares held by them.

Briefing newspersons on the rationale behind this move, NPIL chairman Ajay Piramal said that this exercise will see NPIL emerging as a core pharmaceutical company with improved financials. Though few companies have so far made a similar move in order to present a better consolidated picture, NPIL is the only company which is offering free shares to its shareholders in this process.

NPIL will thus not have to include the performance of GGPL while presenting a consolidated balance-sheet this fiscal.

“NPIL will now focus on pharma, with improved consolidated financials, conserving its capital outlay for its intellectual-asset intensive business. The move will enable NPIL to vigorously pursue its growth strategy in its core pharma business,” Piramal added.

Gujarat Glass is among the top three flaconnage companies in the world in terms of volume, besides being the leader in the domestic market. Private equity funds led by J P Morgan hold 46 per cent in GGPL and the rest is held by NPIL. However, there is a covenant which does not allow these investors to exit. This condition will now be transferred to the holding company.