The R K Somany-promoted Hindustan Sanitaryware & Industries (HSIL) plans to demerge its glass division into a separate company, subject to the approval of shareholders. This is a part of the restructu…
The R K Somany-promoted Hindustan Sanitaryware & Industries (HSIL) plans to demerge its glass division into a separate company, subject to the approval of shareholders. This is a part of the restructuring exercise being undertaken on the recommendations of Ernst &Young India (E&Y), a company release said. E&Y had been appointed to facilitate restructuring and provide strategic thrust to HSIL“s businesses. As per the recommendations, HSIL will separate its glass and sanitaryware businesses as two individual companies as well as restructure the share capital. The entire process is expected to take about six months. The segregation of the glass business into a new company through a demerger will be carried out as per Sections 391-394 of the Companies Act 1956. As part of the restructuring of the share capital, equity shareholders of HSIL will be allotted one equity share in the new glass company for an equivalent share held in HSIL, by a reduction of the share premium account of HSIL to the extent of INR 5.610,000,000. On the other hand, non-promoter equity shareholders of the existing company shall convert their equity share into a debentures of a face value of INR 50. The above are subject to the high court approval. The redemption will be in three equal annual installments from the date of allotment of these debentures. The coupon rate on the debentures will be 10%. HSIL“s turnover amounted to INR 1,940,000,000 for the financial year ending March, 2002.