Shareholders of Wipro have given their nod for the company’s demerger plan.
In a statement published on the company’s Web site, Wipro said, “We write to inform the stock exchanges that the shareholders at the court convened meeting held on December 28 have approved the scheme of arrangement between Wipro Ltd, Azim Premji Custodial Services Private Ltd and Wipro Trademarks Holding Ltd.”
Earlier this month, the Karnataka High Court had issued a directive to Wipro Ltd to get a go-ahead from shareholders to transfer its non-core businesses to Azim Premji Custodial Services.
During the second quarter results in November, Wipro had announced its intentions to hive off its non-IT businesses into a separate unlisted company so that it could focus on information technology business.
About 393 shareholders were present at the extraordinary general meeting, including 18 from promoters and promoter groups, according to a Wipro statement.
The new company, Wipro Enterprises, will include Wipro Consumer Care & Lighting, including the furniture business, Wipro Infrastructure Engineering and the medical diagnostic product and services business, which is its joint venture with GE.
Wipro promoter Azim Premji will remain the Executive Chairman of Wipro and will be the non-executive Chairman in the new entity.
Three options
According to the demerger plan, Wipro shareholders have three options. They can receive one equity share with face value of Rs 10 in Wipro Enterprises for every five equity shares of Rs 2 each in Wipro that they hold; or receive one 7 per cent redeemable preference share in Wipro Enterprises with face value of Rs 50 for every five equity shares of Wipro that they hold; or exchange the equity shares of Wipro Enterprises and receive as consideration equity shares of Wipro held by the promoter. The exchange ratio will be one equity share in Wipro for every 1.65 equity shares in Wipro Enterprises.
Wipro founder and promoter Azim Premji along with his promoter group companies hold 78.31 per cent in the company as of September, according to BSE data.
According to SEBI mandates, Wipro promoter Azim Premji has to reduce promoter stake in the company to 75 per cent by June 2013.
Details on whether the demerged entity will be listed were unavailable as a Wipro spokesperson did not respond to calls.