The GVK Group, which is a promoter of Novopan Industries Ltd, an enterprise manufacturing particle boards, has decided to put it on the block.
The board of directors of the diversified Hyderabad-based GVK Group company, which has evaluated various options of resuming the operations of the loss making particle board business, has decided to either sell, lease or divest part stake in the company.
This move follows a recommendation of the Expert Committee appointed by the board of directors which has proposed that these options could be considered in the light of changed business environment and potential challenges for running the business.
Accordingly, the committee approved to sell or lease or otherwise dispose off or transfer in part or substantially the whole of one or more undertaking/s of the company located at Patancheru and Shadnagar, both close to Hyderabad in Andhra Pradesh.
However, this is subject to the approval of shareholders. A postal ballot has been proposed to seek their nod as per the provision of the Companies Act.
Exploring options
The company board has evaluated various options of resuming the operations of Novopan's particle board business as presented by the committee appointed by the Board and decided to put it on the block.
The committee felt that running the business in current form will put enormous burden on the company and the shareholders and recommended that carrying on the business in the present form may not be advisable and suitable alternatives need to be worked out to avoid the deterioration in the assets both physical and monetary values.
The Board decided to extend the due date of redemption of 2.5 crore non-cumulative redeemable preference shares of Rs 10 each, issued in June 2011, by one year. These were due for redemption on June 10, 2012.
The company shares ended the day's trade at Rs 30.15, down 1.95 per cent.