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Home arrow News arrow Business News arrow Texmaco approves demerger of heavy engineering and steel foundry business
Texmaco approves demerger of heavy engineering and steel foundry business Print E-mail
Written by Ravi   
Wednesday, 24 February 2010
Kolkata: Texmaco has approved the demerger of its heavy engineering and steel foundry divisions and their transfer to the Texmaco Machines Limited (TML). The heavy engineering and steel foundry business of Texmaco, along with all assets and liabilities, would now be transferred to TML. Texmaco and TML will both have their own management team and administrative set up.

The current share capital of TML, fully paid up and entirely held by Texmaco, consists of 546,00,000 equity shares of Re.1 each. All shareholders on the record date, would be issued shares in TML in the ratio 1:1.

"The two businesses of the company namely engineering and real estate, are in different stages of growth. The engineering business is well established and is poised to achieve greater heights with the development of railway infrastructure in the country," said Saroj Poddar, chairman of Texmaco.

Texmaco is engaged in the business of designing and manufacturing wagons, components for coaches, locomotives, electrical multiple units, railway track materials, structurals, hydro-mechanical equipment, process engineering equipment, agro-machinery equipment, steel castings, ingots and other products in its steel foundry division.

"The real estate business, on the other hand, is at a fairly nascent stage. The valuations attributable to these businesses are driven by vastly different parameters. I believe that the separation of these businesses will unlock shareholder value by enabling greater management focus in each of the companies," he said.

"The fund requirement for both the engineering and the real estate businesses differ significantly in both timing and quantum and the nature of investors that would prefer to participate in each of these businesses are also different. The de-merger will enable investors to participate in the business of their choice. It would also enable the management to raise funds in an efficient manner," said Ramesh Maheshwari, Vice Chairman, Texmaco Ltd.

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