 "Kesoram Industries gains on plans to hive off rayon business")
Kesoram Industries has rallied 8% to Rs 111 on the BSE after the company announced plans to transfer the rayon and transparent paper business to unlisted Cygnet Industries through a slump sale.
In a notice to the bourses, Kesoram said it would transfer the rayon undertaking to Cygnet through a slump sale for not less than Rs 480 crore. SBI Capital Markets did the valuation of the business.
Cygnet is proposed to be converted into a wholly owned subsidiary once Kesoram Industries acquires its entire share capital from March 31. Shareholders’ approval would be sought through postal ballot and the entire transaction is proposed to be completed by June 30, 2016.
Kesoram Industries’ rayon business accounts for less than 5% of its total turnover of Rs 4,873 crore as on March 31, 2015.
In past five trading sessions, the stock surged 29% from Rs 86 on March 17, as compared to 2% rise in the S&P BSE Sensex.
Kesoram Industries, the B K Birla group company on March 22 sold its investments in listed companies worth Rs 400 crore to Birla group holding company, Pilani Investments, the holding company of Birla group. This comes months after Kesoram sold its tyre business to JK Tyres for Rs 2,200 crore.
At 11:39 AM, the stock was up 5% at Rs 108 as compared to 0.58% decline in the S&P BSE Sensex. Around 158,000 shares changed hands on the counter on the BSE so far.
In a notice to the bourses, Kesoram said it would transfer the rayon undertaking to Cygnet through a slump sale for not less than Rs 480 crore. SBI Capital Markets did the valuation of the business.
Cygnet is proposed to be converted into a wholly owned subsidiary once Kesoram Industries acquires its entire share capital from March 31. Shareholders’ approval would be sought through postal ballot and the entire transaction is proposed to be completed by June 30, 2016.
Kesoram Industries’ rayon business accounts for less than 5% of its total turnover of Rs 4,873 crore as on March 31, 2015.
In past five trading sessions, the stock surged 29% from Rs 86 on March 17, as compared to 2% rise in the S&P BSE Sensex.
Kesoram Industries, the B K Birla group company on March 22 sold its investments in listed companies worth Rs 400 crore to Birla group holding company, Pilani Investments, the holding company of Birla group. This comes months after Kesoram sold its tyre business to JK Tyres for Rs 2,200 crore.
At 11:39 AM, the stock was up 5% at Rs 108 as compared to 0.58% decline in the S&P BSE Sensex. Around 158,000 shares changed hands on the counter on the BSE so far.