The Board of Directors of Rane (Madras) Limited ("RML"), Rane Brake Lining Limited ("RBL") and Rane Engine Valve Limited ("REVL"), at their respective meetings held today, have approved the proposed reorganization through a scheme of arrangement ("Scheme") which entails merger of RBL and REVL into RML ("Transaction"). The merger significantly simplifies the group structure by consolidating listed operating companies and aligns public shareholders' interest by converging their stake at a single listed entity.
Upon the Scheme becoming effective:
- RBL shareholders will receive 21 fully paid-up equity share(s) of RML for 20 fully paidup equity share(s) of RBL held by them as on the record date.
- REVL shareholders will receive 9 fully paid-up equity share(s) of RML for 20 fully paidup equity share(s) of REVL held by them as on the record date.
The respective Board have approved the entitlement ratio based on the recommendations of independent valuers.
The Scheme is subject to the necessary regulatory and customary approvals including approval of the stock exchanges, SEBI, the respective shareholders, and creditors of each of the companies and NCLT (Chennai bench). Implementation of the scheme is expected to take around 9 to 12 months subject to receipt of the requisite approvals.
Strategic Rationale and Benefits
The reorganization brings all operating business subsidiaries under one single entity. The proposed transaction will create a larger company with a combined turnover of Rs. 3,373 crore for the trailing twelve months period ended December 31, 2023 (i.e., Jan'23 to Dec'23) on a proforma basis.
The scheme envisages:
- Simplification of group structure to capture full value of the listed operating businesses of the group
- Unlocking of synergies leveraging stronger business connect across product lines and enhancing operational and financial efficiencies through scale
- Creation of a larger entity increases flexibility to raise capital for growth pursuits, both organic and inorganic
Commenting on the Transaction, Mr. L Ganesh, Chairman, Rane Group said, "Today marks an important day in our journey to create value for our stakeholders. We welcome the respective Boards' decision to approve the proposed reorganization which allows all shareholders to participate in the growth of a larger auto component player with diversified product lines with exposure to the attractive automotive industry. The merger will help unlock various synergies among the businesses and will enhance stakeholder value for the long term."
Mr. Harish Lakshman, Vice Chairman, Rane Group added, "This reorganization scheme demonstrates our commitment to take actions that create value for our shareholders. The transaction simplifies the group structure by bringing together listed operating businesses and creating a platform that is well poised for the next phase of growth."
Shares of Rane (Madras) Limited was last trading in BSE at Rs. 736.45 as compared to the previous close of Rs. 723.35. The total number of shares traded during the day was 726 in over 147 trades.
The stock hit an intraday high of Rs. 741.20 and intraday low of 717.05. The net turnover during the day was Rs. 531989.00.
Shares of Rane Brake Lining Limited was last trading in BSE at Rs. 868.65 as compared to the previous close of Rs. 854.75. The total number of shares traded during the day was 1043 in over 101 trades.
The stock hit an intraday high of Rs. 876.60 and intraday low of 853.50. The net turnover during the day was Rs. 902890.00.
Shares of Rane Engine Valve Limited was last trading in BSE at Rs. 443.10 as compared to the previous close of Rs. 440.60. The total number of shares traded during the day was 1214 in over 55 trades.
The stock hit an intraday high of Rs. 445.95 and intraday low of 434.05. The net turnover during the day was Rs. 534593.00. |
