Oriental Carbon To Shift Carbon Black Arm
The Jagdish Prasad Goenka group controlled Oriental Carbon & Chemicals Ltd (OCCL) has decided to transfer its carbon black division to a sister company, Posh Investment Ltd (PIL), for Rs 77 crore.
The demerger decision, which was taken by the OCCL board yesterday, will be placed before the shareholders for their approval and then will be filed to the concerned high courts.
According to the no-cash deal between the two JP Goenka companies, PIL will issue one crore equity shares of Rs 10 each with a premium of Rs 67 each to OCCL. The shares will be treated as OCCL's investment during the current financial year.
A company source said, "The carbon black division, the main money spinner of the Rs 122.40 crore (as on March 1999) OCCL will be transferred to PIL as a going concern with all its assets and liabilities."
Although assets of liabilities of the carbon black division could not be ascertained, it is learnt that OCCL has an asset base of Rs 55.28 crore as against liabilities of Rs 128.84 crore.
After the formalities of the proposed demerger is over, OCCL will continue its business of manufacturing and marketing of insoluble sulphur, chemicals and fertilizers.
However, OCCL shareholders are unsatisfied with the deal as current market price of the closely- held PIL scrips could not be ascertained. " That a premium of Rs 67 is charged for shares of a company, which is not being traded on the bourses is a bit uncommon," an ordinary shareholder said.
OCCL engaged into the business of carbon black through the acquisition of Oriental Carbon nearly 16 years ago.
Incorporated as Dharuhera Chemicals to produce sulphuric acid, the company acquired its present name after the amalgamation of Oriental Carbon with itself in 1984.
In 1998-99, OCCL's turnover dipped by a 24.79 per cent to Rs 122.40 crore from the previous year's Rs 162.76 crore. Net profit went down by 35 per cent to Rs 26 lakh. The company has an equity share capital of Rs 9.17 crore.
Financial performance of PIL, a subsidiary of OCL Investment & Leasing, which is wholly-owned by OCCL, could not be available. However, it is learnt that OCL Investment & Leasing incurred a net loss of Rs 74 lakh out of a turnover of Rs 52 lakh.