Orient Paper and Industries Ltd (OPIL) has announced its intentions to demerge its cement business into Orient Cement Ltd.
OPIL shareholders will get one new equity share of Orient Cement for each equity share that they hold, in addition to their existing OPIL shares. On effectiveness of the demerger, Orient Cement is proposed to be listed on BSE and NSE, being exchanges where OPIL is currently listed.
The Board of OPIL approved the classical demerger of the cement business with mirror shareholding as it believes that the restructuring will meet the following objectives:
- Creation of a pure-play cement company and to provide existing shareholders an opportunity to participate directly in the cement business.
- Enable both entities to explore various options to augment their growth plans.
- Sharpen management focus and assign greater accountability for each of the businesses.
- Unlock shareholder value as the demerger allows both companies to find their true value.
The demerger will be undertaken through a Court approved Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956 and will be subject to approval of the Hon’ble High
Court of Orissa. Post implementation of the Scheme, Orient Cement will be listed on the National Stock Exchange and the Bombay Stock Exchange.
The company’s Chairman, Mr C K Birla, said: “Orient Paper and Industries, in its effort to enhance shareholder value has undertaken this restructuring exercise. The company has ambitious plans for its cement business and the demerger will provide an opportunity to shareholders to directly participate in the pure-play cement company.”
Read the article online at: https://www.worldcement.com/asia-pacific-rim/27072011/orient_paper_and_industries_to_demerge_its_cement_business/