Meghmani Organics to split businesses into 2 India listings
Shareholders who do not want stakes in the two new listcos may exit with an offer of S$0.72 per share
Nisha Ramchandani
Singapore
INDIA-BASED Meghmani Organics is restructuring its businesses into two separately listed companies on the Indian stock exchanges, after which it will be wound up.
As a result, its depository shares on the Singapore Exchange (SGX) will be delisted. Shareholders who do not wish to get shares in the new listcos can opt to receive a cash offer of S$0.72 per share.
Aside from its primary listing on SGX, it also currently has a secondary listing on the National Stock Exchange (NSE) of India and the Bombay Stock Exchange (BSE), on which the company's equity shares are traded.
There are 25.78 million depository shares listed on SGX, which constitute about 5.07 per cent of the total number of issued equity shares.
The last traded price of the depository shares on SGX on Tuesday, the last market day prior to the meeting of the directors to approve the announcement, was S$0.58 per share. The cash offer works out to a premium of 24.1 per cent over the depository share price.
The highest and lowest closing prices of the depository shares on SGX in the 12 months leading up to and including the last market day are S$0.68 and S$0.42 respectively.
The offer of S$0.72 per share represents a premium of 5.9 per cent over the highest closing price, and 71.4 per cent over the lowest closing price, Meghmani noted.
It said in the filing to SGX that it will incorporate a new wholly-owned subsidiary in India (New ListCo 1) and transfer its pigments, agrochemicals and power-generation businesses to that company. New ListCo 1 will issue and allot new shares in it to equity shareholders of Meghmani (including depository shareholders) in proportion to their respective shareholdings, based on an independent valuation.
Meghmani will combine its trading business into its 57.16 per cent principal subsidiary, Meghmani Finechem (or New ListCo 2). Similarly, shareholders will receive new shares in that in proportion to their respective shareholdings.
After that, Meghmani will be wound up and both New ListCo 1 and New ListCo 2 will be listed and traded on the Indian stock exchanges.
Meghmani said this would enable the company to unlock value by "listing its separate businesses, and these listings would enable each of the (listed companies) to adopt a more focused and specialised strategy for sustained growth, as well as to pursue individual opportunities and attract potential investors with different investment focus and objectives".
RHT Capital has been appointed the independent financial advisor in Singapore to determine whether the amount offered to depository shareholders is fair and reasonable.
A circular convening an extraordinary general meeting will be issued to shareholders in due course, it added.
