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- The Board of Directors of Gujarat Narmada Valley Fertilizers Ltd. & Narmada Chematur Petrochemicals Ltd , at their meetings held on 28 th February, 2006 approved the merger proposal and as a result, NCPL will be merged into GNFC .
- This decision is in pursuance of actions initiated after deliberations by both the Boards on 27-10-2005 to explore the possibility of a merger.
- The exchange ratio approved by both the Boards is One GNFC Share for every three shares of NCPL
- The appointed date of merger would be 1-4-2005 and the merger will be effective on completion of the requisite formalities.
- NCPL is a subsidiary of GNFC in which GNFC holds 56.45% shares.
- Consequently, the shares of NCPL held by GNFC shall be cancelled and extinguished. As a result, share capital of GNFC will marginally increase.
- 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 int4egration and diversification
- Strategic clarity and a more coherent strategy for growth rather than independent and suboptimal investment decisions.
- Opportunity to plan for future growth avenues with greater choices and larger pool of combined resources.
- operational synergies in terms integrated product mix and production planning decisions based on end to end contribution and profitability,
- Seamless integration and coordinated operations at lower costs
- an access to a combined pool of marketing set up, R&D and product development, seamless and unhindered leveraging of common financial and managerial resources in pursuit of a unified strategy.
- The corporate governance, assurance and risk management aspects will be now addressed jointly and more effectively.
- The mutual and complementary strengths of the merged entities would result into unlocking the true potential of both the companies.
- 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.
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