Calcutta, June 26: The Girdhar Das Kothari group is on a merger and consolidation mode.

The octogenarian group patriarch, a nephew of G. D. Birla, has proposed to bring in the group’s tea and textile businesses under the group flagship, Gillanders Arbuthnot and Co Ltd.

The move would also mean dissolution of General Industrial Society (GIS), which Kothari took over in the fifties.

Six tea estates of Kothari Plantations India Ltd in Assam will be transferred to Gillanders Arbuthnot, making it one of the premiere bulk tea producing and leaf processing company. It will have a capacity to produce over 12 million kg bulk tea and process over 14 million kg leaves.

Gillanders Arbuthnot will also become a diversified outfit with North India Spinning Mills at Akbarpur in Punjab and Modern India Construction Company, a structural engineering and fabrication unit at Sodepur, floated by General Industrial Society, coming under its fold.

Kothari Plantation also had manufacturing outfits for phytochemicals, fine and synthetic chemicals near Madurai in Tamil Nadu and formaldehyde and hexamine at Ranipet in Tamil Nadu.

Kothari told The Telegraph, “The merger and consolidation process will facilitate provisioning adequate resources and utilising combined resources to increase the size of the textile business and a strengthen the tea division. The move will make the group more resilient to any cyclical or other downturn in such businesses.”

Kothari will continue as chairman of Gillanders Arbuthnot, while his son, Arun Kumar Kothari, will be the chairman of the other two group companies.

The daily business of the group is currently looked after by Arun Kumar Kothari. He is on a business tour to Europe and was unavailable for comment.

Gillanders Arbuthnot has an equity base of Rs 4.84 crore, (promoters’ holding 56 per cent), General Industrial Society Rs 6.42 crore (promoters’ holding 58 per cent) and Kothari Plantation Rs 3.83 crore, where Kotharis held as much as 99 per cent.

As the General Industrial Society gets dissolved, its shareholders will be allotted one fully paid Gillanders Arbuthnot’s share for every three held.

After the merger of group companies, Gillanders Arbuthnot’s authorised capital is proposed to be raised to Rs 20 crore from Rs 10 crore.