Mysore Kisloskar Ltd, part of the Rs 2,600 crore Kirloskar group, has decided to merge Kirloskar Institute of Advanced Management Studies (Kiams) with the company.
To facilitate the merger, Mysore Kirloskar has proposed to issue and allot equity shares of the company to the members of Kiams. Under the scheme of amalgamation, equity shares of Rs 10 each of the company, credited as fully paid, will be issued to the shareholders of Kiams.
However, the merger is subject to the approval of the Karnataka High Court. The company has called for an extraordinary general meeting on April 25 to receive shareholders approval for the proposal.
Last year, as part of its goal to promote a new company, Kirloskar Toyoda Textile Machinery Ltd, Mysore Kirloskar had invested Rs 88 lakh in the equity shares of the latter. Mysore Kirloskar is engaged in the manufacture of machine tools, packaging machinery and castings.
Under the share swap ratio, Mysore Kirloskar has proposed that for every two equity shares of Rs 10 each of Kiams, one equity share of Rs 10 each of Mysore Kisloskar will be issued to the shareholders of Kiams. The company said the new equity shares to be allotted shall rank pari passu with the existing equity shares of Mysore Kirloskar.
However, unless the merger scheme is approved by the Karnataka High Court, the swap ratio will not be final.
Kiams was incorporated with the main intention of providing training in various disciplines of the management to the officers and managers of Kirloskar group of companies and also other firms.
However, Kiams was depending on the company for various infrastructural facilities. In view of the infrastructural constraints, Mysore Kirloskar said it has decided to amalgamate Kiams with it.
The company maintained that the amalgamation will benefit it since the pooling of the resources will enable the company to have a larger net worth.
Since the companys existing memorandum of association does not permit running an educational and training institute, it has also decided to alter certain clauses of the company to enable taking up the new activity. The company maintained that the proposed new training activity will not require any additional capital outlay; The existing infrastructural facilities and common services can be shared with the Institute, the company said.
Mysore Kirloskar had made a turnover of Rs 120.5 crore during 1996-97 against Rs 92.5 crore earned in the previous year.
