The board of directors of ITC Ltd at its meeting today approved the demerger of the non-engineering business of subsidiary Wimco Ltd and the related scheme of arrangement.
The non-engineering business comprises safety matches and agri (forestry) businesses. ITC will merge these units with itself.
The scheme, which is subject to approvals as necessary, will take effect from April 1, 2013, the company said in a filing to the BSE.
Upon it becoming effective, the members of Wimco Ltd will be entitled to two ordinary shares of Re 1 each of ITC for every 77 equity shares of Re 1 each of Wimco Ltd held by them on such date as may be determined, the filing said.
Apart from the agri and matches businesses, Wimco has interests in manufacturing packaging machinery.
ITC along with its Russell Credit Ltd, a wholly owned investment subsidiary, holds 98.21 per cent of the equity share capital of Wimco.
The ITC stock was up 1.3 per cent (at around 3 p.m.) at Rs 302.