Monday, 3 April 2017
SCHEME OF AMALGAMATION – MODERN TERRY TOWEL LIMITED (I.E MTTL) WITH MODERN INSULATOR LIMITED (I.E MIL)
Modern Terry Towel Limited (i.e MTTL): Transferor Company
Modern Terry Towel part Modern Group was originally incorporated in Year 1976 under the name of Modern Woolen Private Limited. Modern Terry Towel set up a 100% export oriented manufacturing facility in collaboration with Courtaulds, U.K at Ahemdabad, Gujarat. Under the scheme of arrangement by Rajasthan Government woolen division was transferred to Modern Thread (India) Limited and the company acquired it new name “Modern Terry Towel Limited (I.e. MTTL).MTTL manufactures world class Towels. It is into manufacturing of terry towels in India. It has manufacturing capacity of 9000 metric tons that is around 20 million pounds of terry towel per annum. By Year 2000, the company suffered huge losses in the business affecting its net worth, due to Industrial recession in late 90’s, liquidity crunches , drop in sales margin and rise in finance cost resulting into declaration of sick company by BIFR.
Modern Insulators Limited (i.e MIL): Transferee Company
Modern Insulator Limited (Also known as MIL) is one of the leading manufacturer of high voltage porcelain insulators in India. Incorporated in 1985 in collaboration with Siemens AG, Germany, MIL has become one of the leading brand in the High Voltage Insulator segment. The company is going to get live for trading on BSE due to revocation of suspension (BSE Code – 515008 Script ID – MOSINSU) and ISIN – INE197301018.
(More Detail – Read - Modern Insulator – Revocation of Suspension on BSE)
Scheme of Amalgamation:
The appointment date of scheme of amalgamation is considered as 1.1.2008.
Restructuring of Capital under the scheme of Amalgamation:
1. Accumulated dividend on Preference Shares outstanding till date shall be waived off by MTTL.
2. Cumulative Preference shares of MTTL shall be converted to Equity Shares at par and the converted equity shares shall be restructured in line with other paid up capital.
3. Existing paid up capital of MTTL shall be written down by 60% against the accumulated loss.Thus the existing paid up capital of MTTL of 54626500 shares of face value 10 shall become 54626500 shares of face value Rs. 4 each.
4. Than after capital reduction every 2.5 shares of Rs. 4 each will be consolidated to 1 share of Face Value 10 each. Thus revised paid up capital of MTTL shall be 21850600 shares of Face Value Rs. 10 each.
5. Upon Amalgamation with MIL, shareholders of MTTL shall be allocated 2 shares of MIL against 3 shares of MTTL.
1. MTTL shall have a positive net worth.
2. MIL shall infuse resources in MTTL for its operational use aided by tax saving under u/s 72A and thereby increase its capacity utilization of terry towel plant above breakeven level.
3. It will help MIL meet its liabilities and other debt requirements.
4. MIL shall get tax benefit u/s 72A of Income Tax, this is enable MIL to generate additional cash surplus for infusion to MTTL for its rehabilitation.
5. Overall there will be saving in admin cost as the two group companies shall be running under same management head.
(Read more – Scheme of Amalgamation - https://www.moderninsulators.com/Investors/invpdf/BIFR_Order.pdf)
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