CG gains after board approves scheme of demerger of Consumer BU

Crompton Greaves rose 0.64% to Rs 180.95 at 15:10 IST on BSE after the company said that its board of directors at its meeting held today, 3 March 2015, has approved scheme of demerger of Consumer Business Unit.

The announcement was made during market hours today, 3 March 2015.

Meanwhile, the BSE Sensex was up 152.26 points, or 0.59%, to 29,632.76.

On BSE, so far 4.06 lakh shares were traded in the counter, compared with an average volume of 6.48 lakh shares in the past one quarter.

The stock hit a high of Rs 184.20 and a low of Rs 178.15 so far during the day. The stock hit a 52-week high of Rs 231 on 3 February 2015. The stock hit a 52-week low of Rs 126.05 on 3 March 2014.

The stock had underperformed the market over the past one month till 2 March 2015, falling 2.49% compared with 1.16% rise in the Sensex. The scrip had also underperformed the market in past one quarter, declining 4.77% as against Sensex's 3.57% rise.

The large-cap firm has an equity capital of Rs 125.35 crore. Face value per share is Rs 2.

Crompton Greaves said a new scheme of demerger of the consumer products business unit of the company into CG's wholly owned subsidiary, Crompton Greaves Consumer Electricals was approved by the board, and the existing scheme with Crompton Greaves Consumer Products is withdrawn. The new scheme consists of 100% vertical demerger of the Consumer BU, and will come into effect from the appointed date 1st October, 2015, subject to receipt of all regulatory approvals.

On 19 February 2015, the board based on comments received from the SEBI, the stock exchanges and investors' feedback, had decided, in principle to implement a 100% demerger of the Consumer Products business, such that shareholding pattern of the resulting Consumer Company shall mirror the shareholding pattern of CG, The scheme based on this principle today, 3 March 2014 was considered and approved by the board.

Under the scheme, CG will transfer the Consumer Products Business undertaking including related businesses, undertakings, properties, investments, intangibles, contracts (including employee contracts) and liabilities into CGCEL. CGCEL will issue and allot to the shareholders of CG as on record date 1 share of Rs 2 each for every share held in CG. Upon demerger, shareholding of CG in CGCEL will get cancelled and the shareholding pattern of CGCEL will mirror the shareholding pattern of CG, CGCEL will apply for listing of shares on the BSE and NSE. Upon scheme becoming effective, and subject to the requisite regulatory approvals including those from stock exchanges, and SEBI, shares of CGCEL are proposed to be listed on the BSE and NSE.

Crompton Greaves' consolidated net profit jumped 342.3% to Rs 274.29 crore on 5.7% rise in total income to Rs 3625.21 crore in Q3 December 2014 over Q3 December 2013.

CG was established in 1937 in India; and, is into management and application of electrical energy.

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