The Gujarat High Court has approved the merger of Welspun India Ltd. and Welspun Global Brands Ltd.
Also, following the court's recent approval, Welspun Global Brands Limited has been merged into Welspun India Ltd. and the former's international distribution business will now be taken care by Welspun India Ltd.’s subsidiary – Welspun Retail Ltd.
"While Welspun Global Brands Ltd. has been merged with Welspun India Ltd., Welspun Retail Ltd.- a subsidiary is being re-christened as Welspun Global Brands Ltd. The subsidiary will now look after both domestic and international retail distribution, supply and warehousing. The parent company Welspun India Ltd. will look after manufacturing. From the shareholder’s perspective, it is a win-win situation since they would get to own manufacturing, distribution and retail operations of the company," said Dipali Goenka, Managing Director - Welspun Global Brands Ltd.
The scheme of arrangement under sections 391 to 394 of the Companies Act, 1956, was approved by Justice R M Chhayya on Monday.
"On the facts and in the circumstances, the Court finds that the Scheme of Arrangement is not prejudicial to the interest of the members of the petitioner Companies or to the public interest. The Scheme is thus sanctioned. It is, however, observed that the Transferor Company will preserve its books of accounts, papers and shall not dispose of the records without the prior permission of Central Government u/s. 396A of the Companies Act, 1956.," the court ordered.
Welspun India Ltd had approached the High Court early this year seeking permission for the scheme of arrangement in the nature of merger. Based on the court order meetings of the equity shareholders, secured creditors and unsecured creditors of the petitioner company were held on August 4, 2012 where the scheme was approved by the requisite majority of the equity shareholders, secured creditors and the unsecured creditors of the company.
On its part, Welspun India Ltd on Tuesday informed Bombay Stock Exchange saying, "In the matter of the Composite Scheme of Arrangement between the Company, Welspun Global Brands Limited and Welspun Retail Limited approved by the Board of Directors of the Company on May 07, 2012 , note that the Honourable High Court of Gujarat at Ahmedabad has passed an order approving the Scheme on November 26, 2012." Meanwhile, the Rs 3,000 crore textile business expects to peg a CAGR of over 20 per cent for its topline and 35-40 per cent for its bottomline for the fiscal year ending March 31, 2013.
