The K K Bangur group plans to bring its two electrode makers-Graphite India and Carbon Everflow- and three subsidiaries of the companies under one umbrella.
The boards of the two companies will consider the merger proposal separately on Monday. Post-merger, the companies will create the country's largest electrode maker with a size of Rs 400 crore plus.
K K Bangur, chairman of the group, was not available for comments as "he was busy in meeting." Graphite India vice-president (corporate) S Chaudhary said the move was aimed at sharpening the group's focus on electrode business by amalgamating two companies engaged in same line of activities.
Chaudhary, however, declined to comment on which the holding company of the merged entity could be. " I can not comment on whether Graphite India or Carbon Everflow will be the holding company post-merger. The issue will be discussed at the boards of the companies on November 12," he said.
Industry experts said if the principle of merging the smaller company with the bigger one maintained, Carbon Everflow would be merged with Graphite India. Carbon Everflow posted a net profit of Rs 10.47 crore on a total income of Rs 145.14 crore in 2000-01. During the same period, Graphite India posted a net profit of Rs 19.16 crore on total income of Rs 264.19 crore.
Carbon Everflow has an equity capital of Rs 12.49 crore and has a reserve of Rs 107.98 crore, while Graphite India's equity capital and reserves stood at Rs 12.07 crore and Rs 138.99 crore, respectively.
Chaudhary said two subsidiaries of Graphite and one of Carbon Everflow could come under the merger proposal. However, he could not name them.
He said the promoters would hold "comfortable level of stake" in the merged entity. Currently, the K K Bangur group holds 50.75 per cent in Graphite India and 53.21 per cent in Carbon Everflow. The group's other manufacturing company GKW Ltd has been referred to the Board for Industrial and Financial Reconstruction.
