Court Okays Itc & #39;S Plan To Hold Meeting

The Calcutta High Court today permitted tobacco giant ITC Ltd to hold its ordinary shareholders meeting on December 7, 2001, at Science City Main Auditorium , Kolkata, to consider the proposed scheme of amalgamation of ITC Bhadrachalam Paperboards Ltd with the company, under the chairmanship of an independent person.

Justice Asoke Ganguli, responding to a petition of ITC Ltd, appointed Tapash Banerjee, bar-at-law and a senior advocate, as chairman of the meeting. ITC Ltd filed the application for holding the meeting of its shareholders to consider the scheme of amalgamation which was affirmed by Ravi Tandon, finance advisor of the company. The board of directors of both the companies at their respective board meetings have already approved the scheme.

 

While moving the petition, Sudipta Sarkar, S N Mookherjee, Ratnanko Bannerjee and Aniket Agarwal, counsel for ITC Ltd, stated that ITC had promoted the ITC Bhadrachalam in 1975. In 1998, the paper company became a subsidiary of ITC Ltd.

"The amalgamation would unleash large operational and financial synergies with relatively small increase in capital employed since the ITC Ltd is already funding over 65 percent of the capital employed of the ITC Bhadrachalam. This in turn is expected to create a favourable impact on earnings per share in both the short and long run," the petition said.

It was argued by the ITC counsel that the scheme would also be in the national interest as it would favourably impact foreign exchange conservation and earnings of the country beside securing a large scale of employment among the economically weaker section of rural Andhra Pradesh.

The mill of the company is situated at Bhadrachalam, a town in Khamman district of Andhra Pradesh.

It was contended that the amalgamation will enable better and more efficient utilisation of the various resources of both the companies and the joint business will generally be carried on more conveniently which will have beneficial results for both the companies, its members and other stake holders.

The scheme of amalgamation mainly proposed that the scheme will be give effect from April 1, 2001 (effective date) . One ordinary share of ITC will be given to ITC Bhadrachalam shareholders against every 16 shares held by them. All the employees of the ITC Bhadrachalam in service on the effective date shall on and from the effective date, become the employees of the ITC Ltd on the same terms and conditions on which they are engaged by the ITC Bhadrachalam without a break in service. ITC will take over the business of ITC Bhadrachalam as a going concern with all its assets, rights, licences and powers and all its debts, outstandings, liabilities, duties and obligations.