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Hercules Hoists decides to demerge its operating business
M & A Critique
|November 2022
Apart from its operating business, lot of old Indian listed companies also house investments in the form of equity shares of other group entities. Over the years, these investments reach a sizable size and peculiarly the returns on investment does not commensurate with the returns generated by the operating businesses. To streamline corporate structure & returns, these companies finally evaluating an option to separate these investments from the core businesses.
After GFL Limited & National Peroxide Limited, Hercules Hoists Limited decided to join the que.
Hercules Hoists Limited ("HHL" or "Demerged Company"), a Shekhar Bajaj group entity, is preliminary engaged in business of manufacturing of mechanical hoists, electric chain hoists, wire rope hoist and other material handling equipment. Along with this it also has investments mainly in the nature of equity shares of other Bajaj group companies. The equity shares of the company are listed on nationwide exchanges.
Indef Manufacturing Limited ("IML" or "Resulting Company") is newly incorporated company for facilitation of the proposed demerger. Currently, IML is a wholly owned subsidiary of HHL.
The Transaction
The proposed Scheme of Arrangement inter-alia provides for demerger of "Manufacturing Business" of HHL to IML.
The "Manufacturing Business" includes manufacturing and sales of diverse types of hoists. Post-demerger, HHL shall house only Investments mainly in the nature of equity shares of other Bajaj Group entities.
Key investments as on 31st March 2022:
This story is from the November 2022 edition of M & A Critique.
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