IVRCL Ltd, the Hyderabad-based infrastructure company, has embarked on a major restructuring of its business, which entails amalgamation of IVRCL Assets and Holdings Ltd with the parent and demerger of the real estate business by setting up a new company.
Effectively, this will put the clock back and take the company to a situation few years ago when it was a single entity-IVRCL Ltd.
The Chief Financial Officer of IVRCL, Mr R. Balarami Reddy, told Business Line “the board of directors of both the companies today approved this move and we now will engage consultants for follow-up action. This could mean appointment of valuers, legal consultants, merchant bankers for deciding swap ratio and other aspects for the process.”
“Then the matter would be taken up for regulatory clearances and shareholders nod. We will then have to convene an EGM after securing necessary nod from the High Court of Andhra Pradesh,” he explained.
IVRCL Assets & Holdings Ltd had earlier informed the BSE that the company board of directors and IVRCL Ltd at the respective meetings held today have accorded in-principle consent to pursue, subject to acceptance of a fair share swap ratio and other commercial matters relating thereto, for amalgamation with IVRCL Ltd.
This will also facilitate demerger of the real estate activity of the company into a separate subsidiary company.
“We have decided to defocus on real estate business. Barring a major 700-acre golf course project in Chennai, which is now under way, we are not taking up real estate projects. We have a land bank of 2,000 acres, whose value can be unlocked,” Mr Reddy said.
The boards intend to meet again to consider the terms of the proposed amalgamation including the share swap ratio after receipt of the valuation report, the fairness opinion and the draft Scheme of Amalgamation and any other matter as required.