Shankara Building Products Limited ("Demerged Company" or "SBPL") is one of the leading organized retailer of home improvement & building products. The equity shares of the company are listed on nationwide bourses.
The demerged entity is current inter-alia operates in two segments:
» Trading Business comprises retail, supply, distribution, and promotion of home improvement and building products.
» Manufacturing Business which comprises of manufacturing of products such as cold rolled strips, precision tubes & pipes, roofing sheets etc.
Shankara Buildpro Limited ("Resulting Company" or "SBL") is recently incorporated to facilitate the demerger transaction. Currently, SBL is a wholly-owned subsidiary of SBPL.
The Proposed Transaction:
SBPL in its board of directors meeting announced its plans to separate its trading/ building material marketplace business from manufacturing business through a Scheme of Arrangement (Scheme) which inter-alia provides for demerger.
The Demerged Undertaking means trading business comprises of retail, supply, distribution, and promotion of various home improvement and building products in India including but not limited to steel pipes and tubes, structural steel products, infrastructure materials, PVC products. aluminum and metal products, fabrication, electrical products, tiles, and sanitary wares, through multiple sales channel(s) The Appointed Date for the proposed demerger shall be 1st April 2024 or such other date as may be approved by the Hon'ble National Company Law Tribunal.
Key rationale for the proposed transaction:
» Overall business structure will be simplified.
» Profit margins and return indicators present a clear view of the strength of demerged business.
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Esta historia es de la edición February 2024 de M & A Critique.
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