Amalgamation to be value accretive to shareholders in addition to other benefits
DIL announced that the Board of Directors at its meeting held on June 21, 2018 has approved the Scheme of Amalgamation (‘Scheme’) with its subsidiary, Fermenta Biotech Ltd (FBL) which is engaged in manufacturing and marketing of bulk drugs including Vitamin D3 and enzymes. Under the terms of the Scheme, 100 equity shares of DIL of ₹ 10 each fully paid up would be issued for every 1,006 equity shares of FBL of ₹ 10 each fully paid up.
However, as the Board had at its meeting held on June 18, 2018 recommended the split/sub-division of shares of DIL from face value of ₹ 10 each to face value of ₹ 5 each, and issue of bonus equity shares in the proportion of 1:1, the number of shares to be issued to FBL shareholders would also undergo a change i.e. 100 equity shares of DIL of ₹ 5 each fully paid up would be issued for every 251 equity shares of FBL of ₹ 10 each fully paid up.
The amalgamation will be value accretive to shareholders of DIL, as they would have directly access to the core business of the Group. The greater integration and increased financial strength and flexibility for the amalgamated entity would result in maximising overall shareholder value. The greater efficiency in cash management of the group and unfettered access to cash flow generated by the combined business will allow it to be deployed more efficiently to fund organic and inorganic growth opportunities, to maximise shareholder value. The pooling of human capital having diverse skills, talent and vast experience would result in improved organisational capability and leadership, allowing the company to compete successfully in an increasingly competitive industry. In addition, more focussed operational efforts, rationalisation, standardisation and simplification of business would result in substantial cost savings.
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