McNally Bharat Engineering Company has approved a scheme of arrangement whereby its products division will be transferred to its subsidiary, McNally Sayaji Engineering.
According to the arrangement, the units of the product division—Kumardhubi in Jharkhand, Asansol in West Bengal and Bangalore in Karnataka—would be transferred to the parent company with effect from April 1, 2008.
The rest of the business of McNally Bharat Engineering would continue in the parent company. As a consequence, McNally Sayaji would issue and allot to McNally Bharat Engineering, 34.55 lakh equity shares of Rs 10 each. Deepak Khaitan, chairman, McNally Bharat Engineering said, the shareholding of the parent company in the merged entity would be 92 per cent, which would give an opportunity to raise capital.
Currently, McNally Bharat Engineering has an order book position of Rs 2,400 crore and another Rs 1,000 crore were in the pipeline. Khaitan said, in the next 6-12 months, McNally Sayaji would look at raising capital but the instrument was yet to be decided. McNally Bharat Engineering was eyeing a turnover of Rs 1,000 crore by March 2009, said Deepak Khaitan, chairman, McNally Bharat.
Last March, the company recorded a turnover of Rs 550 crore. Khaitan added that McNally Sayaji would make a significant contribution to McNally Bharat’s turnover. The combined turnover of McNally Bharat Engineering and McNally Sayaji was likely to be around 1,250 crore by the end of the year.