corporate restructuring cr presentation 26.08.08
TRANSCRIPT
CORPORATE RESTRUCTURING
CORPORATE RESTRUCTURING
Pavan Kumar Vijay
GOVERNING PROVISION
SECTION 391-394 of Companies Act, 1956
Most liberal sections in the entire
Companies Act, 1956.
By way of SCHEME you can
propose & achieve whatever you want
TYPES OF RESTRUCTURING
REDUCTION OF
CAPITAL
MERGERMERGER
DEMERGER
RESTRUCTURING
BIFRHigh Court
Approving AuthoritiesApproving Authorities
MERGER
“Combining of two or more commercial organizations into one in order to increase efficiency and sometimes to avoid competition”.
MERGER
REVERSE MERGER
“As a commercial term, it means when a Healthy
Company (in terms of size, capital or listing status)is merging in a
Weak Company (in terms of size, or
unlisted)”.
SECTION 391-394 of Companies Act, 1956
DEMERGER
“Division of a Company with two or more identifiable business units into two or more separate companies ”
SECTION – 2(19AA) of Income Tax Act, 1961.
“Extinguishing or Reducing the paid-up capital, Securities Premium Account or liability of members with
respect to their unpaid calls”
-AN EFFECTIVE WAY OF INTERNAL RESTRUCTURING
REDUCTION OF CAPITAL
SECTION – 100 – 105 of Companies Act, 1956
SECTION 100 to 105 of Companies Act, 1956
A FEW VARIETY OF MERGER
Unlisted with Listed
Listed with Unlisted
Merger of Subsidiary with Holding Company
Merger with Group Company
Healthy Company with Weak Company
Merger through BIFR
STOCK EXCHANGE’S ROLE
REQUIREMENTS
Listing Agreement Compliances
Stock Exchange Internal Norms
Observations
Compliance of Securities laws
Compliance of Companies Act
•Valuations Analysis
•No undue benefit to Promoters /
Particular group
•Investors interest not to be affected
•Back door Entry for listing
•Change in Management/Control
MERGER THROUGH BIFR MERGER THROUGH BIFR
AN EFFECTIVE
WAY
TO
REVIVE
YOUR
SICK COMPANY
MERGER THROUGH BIFR
MERGER THROUGH BIFR
• Single window clearance for a legal formalities
under Companies Act;
• Relaxation in compliance with Income Tax
related compliances;
• Tax breaks and similar other benefits;
• Exemption from SEBI Takeover Code
REDUCTION OF CAPITAL REDUCTION OF CAPITAL
Types of Reduction of Capital
Types of Reduction of Capital
Writing off Losses & Fictitious Assets
Correction of Over- Capitalization
Distinguishment of the Liability in respect of unpaid portion of face
value.
Distribution of accumulated profits by Payment to shareholders a part of
share capital.
Reduction of Capital- A Strategic Step
Reduction of Capital- A Strategic Step
To Clean-up the Balance Sheet
To rationalize the capital base
Revival of Sick Company
LISTING LISTING
Direct listing is costly & complicated
But Listing of Company provides for…..
Unlocking value of business
Brings liquidity
Attract investors for further growth
Restructuring offers tremendous opportunities for companies to grow &
add value to the shareholders
It unlocks the true potential of the company
It is a Strategy for Growth & Expansion
It also helps in Cleaning up & create Synergy of Resources
To sum up……
Our Clients……
MERGER
Visesh Infotecnics Ltd
MERGER
CHD Developers Ltd
DEMERGER
NIIT Ltd.
MERGER
Surya Vinayak Industries
MERGER
Anant Raj Industries
MERGER
Wrigley India Pvt. Ltd
Our Clients……
MERGER
Shivalik Global Ltd
MERGER
SMC Global Securities Ltd
MERGER
Seasons Textiles Ltd
MERGER OF FIRMS WITH COMPANY
Mira Exim Ltd
MERGER
Reheja Design & Contract
MERGER
Amar Ujala Publication
Our Clients……Reorganization of Capital Structure
Potentially Sick Company
Wiping out Past Losses by OTS with
Banks and Reduction of Paid-up Capital
Pashupati Acrylone Ltd.
Reorganization of various Reserves and improving the Capital
Structure of the Company
Triton Corp Ltd
Potentially Sick Company
Wiping out Past Losses by OTS with
Banks and Reduction of Paid-up Capital
Ashnoor Textiles Ltd
Sick Company RevivalReorganisation of
Loans and Equity to wipe-out past losses
Haryana Petrochemicals Ltd.
Thanks a lot…Pavan Kumar Vijay
Corporate Professionals (India) Pvt. Ltd7/9, Sarvpriya Vihar,New Delhi 1100016
Tel: +91 11 26966100,Fax: +91 11 26967100
Email: [email protected]
Visit us at:www.corporateprofessionals.com