GMR to demerge ferro alloys' business

The board of GMR Industries (GMRIL), the manufacturing arm of the GMR Group, has decided to hive off the ferro alloys division to a separate company called GMR Ferro Alloys and Industries.

This is with a view to focusing on its core competency in sugar and related businesses.

Following the demerger, every preference shareholder holding 100 shares in GMRIL would be getting 38 preference shares in the new company (GMR Ferro Alloys and Industries) and 62 new preference shares in GMRIL in cancellation of their existing 100 preference shares in the company. 

Similarly, every equity shareholder holding 100 shares in GMRIL would be getting 38 equity shares in the new company and 62 new equity shares in GMRIL in cancellation of their existing 100 equity shares in the company. 

All the assets and liabilities pertaining to the ferro alloys division would be transferred to the new company at book value. The effective date of demerger is April 1, 2006. The decision taken by the board at a meeting held on August 12, 2006, is subject to approvals from shareholders, stock exchanges and the High Court of Andhra Pradesh, the company stated in a press release here on Monday.

The company's board has also decided to merge Bharat Sugar Mills  (BSM) registered in Karnataka with GMRIL. BSM is currently a subsidiary of GMR Industries and is implementing a project for construction of an integrated sugar complex with a 3,500-tonne crushing per day (tcpd) capacity expandable to 5,000 tcpd, cogeneration capacity of  24 Mw and a 45-kilolitre per day capacity distillery at a cost of Rs 274 crore. The registered office is being shifted to Andhra Pradesh. The effective date of merger is  April 1, 2006.

GMRIL currently has interests in sugar, cogeneration, distillery and aircraft chartering. Its sugar complex is situated in Srikakulam district of Andhra Pradesh.