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Punjab Tractors Ltd. to merge with Mahindra & Mahindra Ltd Print E-mail
Written by Anand   
Tuesday, 05 August 2008
Mumbai: The Board of Directors of M&M and PTL unanimously approved a scheme of amalgamation of Punjab Tractors Limited (PTL), an M&M subsidiary, with Mahindra & Mahindra Ltd. Mahindra owns a majority stake in Punjab Tractors Limited and had earlier acquired 63.33% stake in PTL in July 2007. MHFL, a wholly owned subsidiary of M&M, currently holds 1.31% of PTL, and is also in the process of being merged into M&M.

Under this amalgamation scheme, pursuant to provisions of Sections 391 to 394 and other relevant provisions of the Companies Act, 1956, PTL will be merged into M&M and all its assets and liabilities will be transferred to M&M at book values. The Appointed Date under this scheme is 1st August 2008. Upon the scheme becoming effective, M&M will transfer all the equity shares held by it in PTL to a Trust, of which M&M is the beneficiary. M&M will issue its shares to PTL shareholders as on record date, based on the swap ratio determined by independent valuers.

Mr. Anand Mahindra, Vice-Chairman and Managing Director, Mahindra Group, said, “PTL is a strategic fit for M&M and its amalgamation with M&M will significantly add to shareholder value. Bringing these two businesses under a single entity will also result in a common management focus, help achieve greater integration benefits and reduce overall administrative costs.”

An independent valuation exercise has been conducted jointly by Ernst & Young and N. M. Raiji & Company.  Based on this exercise, the share exchange ratio for the amalgamation has been arrived at. Equity shares of M&M will be issued to the shareholders of PTL in the ratio of 1 (one) equity share of Rupees 10 each of M&M for every 3 (three) equity shares of Rupees 10 each held in PTL.

The Scheme as approved by the Board is subject to such consents and approvals, as may be required including that of the shareholders and the High Courts of Bombay and Punjab & Haryana.

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