Escorts has announced the merger of three Group companies into its flagship firm Escorts Ltd following a decision at a board meeting held on February 14.
With a retrospective effect from the appointed date of October 1, 2011, all assets and liabilities of the three companies – Escorts Construction Equipment (an Escorts subsidiary), Escorts Finance and Investments and Escotrac Finance Investments and Leasing – will become a part of Escorts Ltd.
“The proposed merger would result in streamlining the Group structure and to create a single robust entity which would carry on the businesses that are integrated and complimentary in nature,” Escorts said in a statement issued to the bourses.
The share exchange ratio is four shares of Escorts Ltd for every 39 shares of Escorts Finance and Investments, apart from four Escorts' shares for every 27 shares of both Escotrac and also Escorts Construction Equipment. The scheme, however, is subject to majority shareholder, regulatory and Court approvals.
Escorts Ltd shares at the BSE were up 2.69 per cent at Rs 87.70 on Wednesday.