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Our Corporate Bureau
New Delhi, Oct 15: Apar Ltd, which is a closely held company belonging to Narendra Desai and family, is being merged with the group's listed company Gujarat Apar Polymers Ltd (GAPL).
GAPL manufactures acrylonitrile butadiene rubber (NBR) at its plant in Ankleshwar. The industrial business of Apar includes the manufacture of aluminium conductors, transformer oils, special rubber process and other industrial oils and styrene butadiene rubber.
According to a press release issued by the company, the merger envisages that GAPL's equity capital of Rs 25.95 crore will be restructured. Each 100 existing shares will be divided in 88 10 per cent cumulative preference shares of Rs 10 each and 12 equity shares of Rs 10 each, the release adds.
With this restructuring, the paid up capital of GAPL will be Rs 22.84 crore of preference capital and Rs 3.11 crore of equity capital, the release further states.
After the restructuring the shareholders of Apar Ltd will be offered 1.8083 shares of GAPL for every equityshare of Apar held by them, the release says. The investment business of Apar will continue to remain with the residual company, which will be 100 per cent owned by the Desais.
The ratio of 1.8083:1 has been determined by the valuers and financial institutions, who hold around 21 per cent GAPL's equity. The release states that the FIs have agreed to the ratio and given their consent for the merger.
The merged entity will have share holding of Rs 20.80 crore, in which the promoters will hold 91.6 per cent, the institutions four per cent and the public 4.4 per cent. The promoters will be diluting their stake holding to 75 years within two years, the release adds.
As a result of the merger, GAPL's sales and net pretax profit in 1997-98 would be Rs 521.61 crore and Rs 17.91 crore respectively, the release adds. It further says that the net profit would be adequate to wipe out the accumulated losses of Rs 10.30 crore and yet leave enough surplus for a reasonable dividend payment.
The EPS of the amalgamatedGAPL will be around Rs 8 on basis of weighted average of expected profits for next five years and the management proposes to solve the odd lot holdings by promoting a trust which will sell the odd lots of the merged entity for the benefit of the shareholders.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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