Jaiprakash Associates today said its shareholders and creditors have approved the hiving off of the cement business to a wholly-owned subsidiary, Jaypee Cement Corporation (JCCL).
"We are pleased to inform that the equity shareholders and creditors of the company, in their respective meetings held on February 25, have duly approved the scheme of arrangement," Jaiprakash Associates said in a communique to the Bombay Stock Exchange (BSE).
The company said while 99.99% of the shareholders who cast their votes favoured the scheme of arrangement, 99.87% of the creditors, who voted, approved the plan.
Cement is one of the major businesses of Jaiprakash Associates, the flagship company of the Jaypee group. Besides expanding capacity in North, East and Central India, it is in the process of setting up manufacturing units in Gujarat and Karnataka.
Jaypee Group has an aggregate installed capacity of 26.20 million tonne per annum of cement at present. It is in the midst of expanding capacity to 35.90 million tonne.
Jaiprakash Associates has interests in areas such as infrastructure development, real estate and hospitality.
The proposed demerger is expected to benefit both the transferor and the demerged firm as it would provide focused management for the respective businesses of the two companies, it had earlier said.
Promoters' hold 46.83% stake in Jaiprakash Associates and the total public shareholding in the company, as on December-end, stood at 53.17%.
Jaiprakash Associates's scrips today closed at Rs 70.10 apiece on the BSE, down 6.22% over earlier closing.