JK Industries to demerge its sugar and agri-genetics business

Mumbai: JK Industries (JKI) has decided to demerge its sugar and agri-genetics business. The board of directors of the company has approved the proposal for the demerger.

It has been decided that pursuant to the proposal for the demerger, 15 equity shares of Rs 10 each will be issued in the sugar company to every member of JKI holding 100 equity shares of Rs 10 each in relation to the demerger of the sugar business.

It has also decided to issue one equity share of Rs 10 each in the agri-genetics company to every member of JKI holding 10 equity shares of Rs 10 each to JKI in relation to the demerger of the agri-genetics business and part of the investments. As a consequence of the demergers, JKI the equity share capital will stand revised from Rs 345.6 million to Rs 259.2 million.

The board of directors has also resolved to amalgamate its subsidiary, Vikrant Tyres, into the residual undertaking of JKI. The valuation report of Lodha Capital Markets for the purpose of such an amalgamation was also accepted by the board of directors and for every five equity shares of Rs 10 each of Vikrant Tyres, two equity shares of Rs 10 each will be issued in JKI (residual). The board of directors empowered its committee to proceed with the preparation of the scheme of arrangement and the petitions for filing.

The company has also made a proposal to the Industrial Development Bank of India (IDBI), and its several options are pending consideration with the lenders. The proposal includes inter alia a possibility of amalgamating JKI and or its undertakings and divisions and Vikrant Tyres for making a combined tyre company. The proposal is under consideration of IDBI and other lenders and the company is not aware of its outcome.