For this, two companies were recently floated — Kakinada Fertilisers Ltd (KFL) and Nagarjuna Oil Refinery Ltd (NORL).
Hyderabad-based Nagarjuna Fertilisers & Chemicals Ltd (NFCL) will soon be split into two entities focusing on oil interests and fertiliser assets.
For this, two companies were recently floated — Kakinada Fertilisers Ltd (KFL) and Nagarjuna Oil Refinery Ltd (NORL).
NFCL has about 71% holding in Nagarjuna Oil Corporation, which has been working on a plan to set up an oil refinery at Cuddalore in Tamil Nadu. Apart from NFCL, the Tatas, too, have a holding in the refinery project.
The holding of NFCL in the refinery project will now be moved into NORL. Similarly, the fertiliser assets, which are primarily located at Kakinada in AP, will be moved into KFL. Additionally, iKisan, another group company with its focus on farmer related services, too would be merged into KFL.
“The objective of restructuring is three fold. Unlocking the shareholders’ value is the primary objective. Additionally, bringing the businesses of the group with similar character into a common fold and strengthening the ability of the group in raising the funds independently for future plans are the other key objectives,” a senior functionary of the company told DNA.
Though NFCL ceases to exist for now, the official said KFL would be renamed as NFCL once the scheme of amalgamation and demerger is approved by the high court of AP.
With the appointed date for the said scheme is April 1, 2011, the scheme would result in creation of two companies.
While KFL would have an equity share capital of Rs59.81 crore and NORL would have an equity base of Rs42.82 crore.
Pursuant to Scheme, in the oil business, one equity share of `1 each fully paid up of NORL will be allotted for every one equity share of Rs10 each fully paid up, held by the shareholders in NFCL.
Additionally, one preference share of Rs10 each of NORL would be allotted for every one preference share of Rs100 each held in NFCL.
For merger of residual NFCL into KFL, 11 equity shares of Rs1 each fully paid up of KFL would be allotted for every 10 equity shares of Rs10 each fully paid up, held by the shareholders in NFCL.
Similarly, one fully paid up preference share of Rs90 each of KFL shall be Issued and allotted for every one preference share of Rs100 each held in NFCL.
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