Bajaj Hindusthan to merge group firm with itself
The country's largest sugar- maker, Bajaj Hindusthan, today said it will merge group firm Bajaj Hindusthan Sugar and Industries Ltd (BHSIL) Ltd with itself to consolidate its position in the Indian sugar market.
The proposal for merger was approved today by the boards of directors of the two companies at separate meetings, Bajaj Hindusthan Ltd (BHL) said in a filing to the Bombay Stock Exchange.
"The boards of both the companies have recommended an exchange ratio of one share of BHL for every five shares of BHSIL," the filing said. BHL holds a 75 per cent stake in BHSIL.
Following the merger, which is subject to shareholder and regulatory approvals, BHL will have a total sugarcane crushing capacity of 1.36 lakh tonnes per day, a distillery capacity of 800 kilo-litres and bagasse-based co-generation thermal power capacity of 105 MW.
"Upon merger, the combined capacities of BHL and BHSIL... will strengthen BHL's position in India's sugar sector and will enable the company to further enhance the overall shareholder value," BHL Joint Managing Director Kushagra Bajaj said.
He said the amalgamation will result in the creation of a single larger entity in place of two smaller entities carrying on similar business under the same management and control.
The merger will result in rationalisation of operations, better profitability, enhanced production capacity and a stronger competitive position, Bajaj added.
Currently, BHL is India's largest sugar producer with a total crushing capacity of 96,000 tonnes per day at its ten plants in Uttar Pradesh (UP). BHSIL has four sugar plants in UP with a total crushing capacity of 40,000 tonnes per day.
BHL shares were trading at Rs 116 on the BSE, up 1.89 per cent, while BHSIL shares were at Rs 23.15, down 1.91 per cent.