The National Company Law Tribunal (NCLT) has approved the scheme of amalgamating five wholly-owned subsidiaries of leading auto component manufacturer Minda Corporation.
The five subsidiary companies are Minda Management Services, Minda SAI, Minda Automotive Solutions, Minda Autoelektrik and Minda Telematics and Electric Mobility Solutions. Post-merger, the revenue size of the standalone entity will more than double to Rs 2,370 crore from Rs 1,133 crore.
Chairman and Group CEO Ashok Minda said the merger will result in simplification of corporate structure and a larger standalone entity.
"This will bring better governance, accountability and efficiency in the system. This move will lead to cost optimisation, efficient treasury management and better value proposition to all the stakeholders," he said in a statement.
All assets and liabilities of the transferor companies will be transferred to Minda Corp at book value as on the designated appointed date of April 1, 2018.
The transferor companies are wholly owned subsidiary companies of Minda Corp. So no new equity shares are required to be issued and the entire share capital of transferor companies will be cancelled and extinguished. Thus the merger is equity neutral, the company said.
"The amalgamation is expected to be beneficial as it will create greater synergies among the businesses and enable them to have access to wider financial resources, increase the managerial efficiencies, lowering of cost structure and higher transparency," it said.
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