GNFC-NCPL decide to merge for consolidation
Mumbai, Mar 1 (UNI) Two public sector undertakings Gujarat Narmada Valley Fertilisers Ltd (GNFC) and Narmada Chematur Petrochemicals Ltd (NCPL) have decided to merge for consolidation.
A decision to this effect was taken by the Board of Directors of GNFC and NCPL at their meetings held on yesterday and as a result, NCPL will be merged into GNFC, said a GNFC release. This decision was in pursuance of actions initiated after deliberations by both the Boards on October 27 last year to explore the possibility of a merger.
The exchange ratio approved by both the Boards was one GNFC Share for every three shares of NCPL and the appointed date of merger would be April one last year and the merger would be effective on completion of the requisite formalities.
GNFC holds 56.45 per cent shares in its subsidiary NCPL.
Consequently, the shares of NCPL held by GNFC shall be cancelled and extinguished. As a result, share capital of GNFC will marginally increase.
Incidentally, GNFC and NCPL are situated on the same campus and NCPL depends upon GNFC for some raw materials and utilities. This merger is coherent with the current corporate trend of consolidation at industry level and also group level.
In a post-merger scenario, both the companies are confident and optimistic that the merged entity will enjoy a combined base of higher profitability and assets, full benefits of vertical integration and diversification and a strategic clarity besides a more coherent strategy for growth rather than independent and sub-optimal investment decisions.
As a result of this merger, the corporate boundaries would disappear to create a fully and truly integrated company. The shareholders of the merged entity would have an access to a combined pool of profits and cash flows, the release added.
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