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Tuesday, May 21, 2002

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Hind Sanitaryware to demerge glass unit to separate co

Our Bureau

NEW DELHI, May 20

THE board of directors of Hindustan Sanitaryware & Industries Ltd (HSIL) has approved a proposal to demerge the glass business into a new separate company. The sanitaryware business will continue to remain with HSIL.

The board's approval for the demerger is, however, subject to the consent of the High Court and the lenders.

The recommendation to segregate the glass and sanitaryware businesses of HSIL into two entities by way of demerger came from Ernst & Young, a professional services firm.

For the year ended March 31, 2001, HSIL reported a net profit of Rs 4.63 crore on a gross turnover of about Rs 194 crore.

In consideration of the demerger of the glass unit to a new company, the existing shareholders of HSIL will receive one equity share in the new company for every existing one equity share held, with a consequent reduction of share premium account to the extent of Rs 5.61 crore.

The board has also approved an Ernst & Young proposal, which recommended that one equity share of a face value of Rs 10 held by the non-promoter shareholder in the existing company be converted into one debenture of face value of Rs 50 subject to High Court approval.

These debentures are redeemable in three equal annual instalments from the date of allotment. The debentures are to carry a coupon rate of 10 per cent.

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