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Tata Chem, Tata Global rise after NCLT nod for scheme of arrangement

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Tata Chemicals and Tata Global Beverages rose by between 1.52% to 2.77% after National Company Law Tribunal (NCLT)'s Mumbai Branch approved the scheme of arrangement between the two companies.

Tata Chemicals rose 1.52% to Rs 700.10. The scrip rose 2.13% to hit an intraday high of Rs 704.40, which is also a 52-week high for the scrip.

Tata Global Beverages added 2.77% to trade at Rs 350.75. The scrip rose 3.20% to hit an intraday high of Rs 352.25, which is also a 52-week high for the scrip.

The National company Law Tribunal (NCLT), Mumbai Bench, vide its order dated 10 January 2020 had sanctioned the Scheme of Arrangement between Tata Chemicals and Tata Global Beverages and their respective shareholders and creditors for the demerger of the consumer products business consisting of the business of sourcing, packaging, marketing, distribution and sales of vacuum evaporated edible common salt for human consumption, spices, protein foods and certain other food and other products from Tata Chemical to Tata Global Beverages.

The NCLT, Kolkata Bench, has also sanctioned the Scheme vide its order dated 8 January 2020.

In May last year, Tata Group had decided to demerge consumer business of Tata Chemicals and merge it with Tata Global Beverages. Tata Global Beverages will be renamed as Tata Consumer Products.

Under the scheme, every shareholder of Tata Chemicals will get 1.14 new equity shares of Tata Global Beverages for every one equity share held in Tata Chemicals.

The management said the combination of the two consumer-focused businesses will benefit both sets of shareholders who will be able to participate in a larger business poised to grow their share of the foods & beverages market with a broader exposure to the attractive and fast growing FMCG sector.

Tata Chemicals shareholders will retain their ownership of a focused science-led chemistry solutions and specialty products company with a leading portfolio of products in basic and specialty chemicals and strong cash flows to support future growth.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, January 13 2020. 12:37 IST