Karamchand seeks HC nod for S C Johnson merger

Consumer products and domestic appliances major Karamchand Appliances Pvt Ltd and its subsidiary Roshni Appliances Pvt Ltd have approached the Delhi High Court for approval of their scheme of amalgamation with S C Johnson Products Pvt Ltd.

By this, the transferor companies, without winding up, would be merged with the transferee company for better, efficient and economical management, the companies stated in their merger scheme.

According to the proposal, the amalgamation would enable S C Johnson (originally known as Lever Johnson (Consumer Products) Pvt Ltd) to consolidate its business operations worldwide and provide significant impetus to its growth, since all the companies are engaged in similar areas of business.

Karamchand Appliances is a wholly-owned subsidiary of S C Johnson, which, along with its nominee Bharat Mehta, holds the entire subscribed and paid-up equity share capital of the former.

"The consolidation of the activities by way of an amalgamation will lead to synergies of operations and a stronger and wider capital and financial base for future growth/expansion," the scheme said.

Besides elimination of duplication of administrative functions, the merger would not only offer better financial structure but also facilitate resource mobilisation and would help achieve better cash flows, it stated.

Under the terms of the scheme, before amalgamation becomes effective, the balance available in the securities premium account (SPA) would be reduced to Rs 1,189,019,000 by offsetting the accumulated losses against the securities premium.

Once amalgamation becomes effective, the balance available in SPA would be reduced to Rs 2,500,000,000. The amount, being in excess of the wants of SC Johnson, would be paid as it is to the sole preference shareholder.

The transferor companies would be dissolved without being wound up and their names would be struck off from the list of companies maintained by the Registrar of Companies, Delhi and Haryana. Besides, the name of SC Johnson Products Pvt Ltd would be changed to Karamchand Appliances Pvt Ltd or Karamchand Appliances Products Pvt Ltd or any other name as the board of directors would decide.