INDIA BUSINESS WORLD - JANUARY 1st - JANUARY 15th
- 2008
LGB BOARD APPROVES DEMERGER OF FORGING BIZ
Decks have been cleared for the demerger of the forging division of Coimbatore-based industrial chain manufacturer LG Balakrishnan & Bros.
The division comprising of hot forging, warm forging and cold forging will be demerged into a separate company LGB Forge after getting the approval of High Court.
During the last fiscal, LGB's turnover was Rs 486 crore of which the forging division contributed 16.5 %.
Post demerger, shares of LGB Forge will be listed on the BSE, NSE, MSE and the Coimbatore Stock Exchange.
The board has approved the demerger with effect from April 1, 2008 and also finalised the swap ratio. "As per the swap ratio, LGB shareholders will be allotted one share of LGB Forge for every one share of LGB," a company official said.
B Vijayakumar, MD, LGB, said that the company, as part of its business realignment strategy, has proposed to de-merge its forging division along with its assets and liabilities including the operations currently covered at its Bangalore, Mysore and Coimbatore plants into a separate company.
"Upon de-merger, we will pursue opportunities to have a global footprint of our operations that includes cross - border acquisitions. We plan to have an overseas presence and likely to enter China, Europe or American markets," Mr Vijayakumar added.
Without disclosing further details, he said LGB is in talks with overseas companies for forming a joint venture for servicing its requirements.
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