D-Link (India), one of the leading IT networking companies in India, has announced to demerge its business into two separate companies.
The scheme of demerger, announced by the company today, plans to have D-Link's branded active networking products into one company, D-Link (India) and the residual business of structured cabling systems, R&D, manufacturing and service operations into another company, Smartlink Network Systems.
The demerger will focus on business operations of the two companies and allow them increased flexibility in taking advantage of the huge growth opportunities in their respective business segments, said a press release.
“The demerger will bring sharper focus to the two distinct set of activities and allow both companies to chart independent long term strategies. This will lead to accelerate growth of the businesses of both companies resulting in enhanced shareholder value,” said K R Naik, executive chairman, D-Link (India).
Each shareholder of D-Link (India) will receive one equity share of face value of Rs 2 in Smartlink Network Systems for each equity share of face value Rs 2 presently held in the company.
Post completion of the steps involved in the demerger process, the new D-Link (India) will have the business of sales and marketing of D-Link branded active networking products and the new company Smartlink Network Systems will have the business of manufacturing, R&D, sales and service of networking products and sales and marketing of SCS products, said the release.
The scheme is subject to the approval of shareholders, creditors and other approvals as may be required including that of stock exchanges, Mumbai High Court, Foreign Investment Promotion Board and Reserve Bank of India.