Dcw Transfers 58% Stake In Captain Cook Firm To Arm

Chemicals major DCW Ltd has transferred its 58.5 per cent stake in DCW Home Products at book value to its newly incorporated company, Crescent Finstock Pvt Ltd. DCWs promoter, Shashi Chand Jain, and his family will hold 28 per cent of Crescent Finstock.

The ownership of DCW Home Products which markets the popular Captain Cook brand will thus pass from DCW Ltd to Crescent Finstock. Crescent was formed last month along with DCW Estates. While Crescent will oversee Home Products, DCW Estates will manage the groups real estate business. The Jains will hold 28 per cent in DCW Estates as well.

 

Shashi Chand Jain has simultaneously re-allocated work among his sons. While the patriarch will continue to be the group chairman, his eldest son, Vivek Jain, will handle DCW Estates and Crescent. Shashi Chand Jains second son, Nilesh, will look after Home Products. Sources said the two sons have been handling the family business for some but have been given independent charges only now.

Company sources said the groups restructuring is aimed at accessing funds independently from the market and helping its subsidiaries to grow without restraint. It is believed that banks and financial institutions prefer to fund a companys core business alone.

The transfer of DCWs holding in Home Products to Crescent means that DCW shareholders will benefit only to the extent of their individual holding in Crescent Finstock. Crescent and DCW Estates will issue shares in the ratio of 1:4 to DCW shareholders. Formal approval is expected at the DCW annual general meeting in Ahmedabad on August 4.

Both DCW Estates and Crescent will issue 72 lakh equity shares at Rs 10 each. Thus, both companies will have an equity base of Rs 7.2 crore each. Estates general reserves and equity will amount to Rs 42.4 crore, while Crescent will have a net worth of Rs 30.87 crore. DCW Ltd will reduce its share premium and general reserve account by about Rs 72 crore in order to build up the net worth of its two associates.