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Emkay - Event Update
Friday, April 13, 2007
Sujana Metal Products Ltd.
(Rs 131, FY08E - P/E - 6x, BUY, Target Price Rs 215)
De-merger/Merger –Gets court Approval
The Hon’ble High Court of Andhra Pradesh has allowed and approved the scheme of arrangement between the company and M/s Sujana Towers Ltd and Amalgamation of M/s Sujana Steels Ltd with the company on 10th April’07. The proposed de-merger will be effected with retrospective effect from July’2006.
The scheme of arrangement between Sujana Metal Products Ltd (SMPL) and Sujana Towers Ltd (STL) and the amalgamation of Sujana Steels Ltd (SSL) with SMPL will help the company to derive the true value of the company which at present is undervalued.The current paid up equity share capital is Rs 388.3 mn of SMPL consisting of 38.83 mn equity shares of Rs 10 each which will be split equally between STL and SMPL. Simultaneously, the face value of equity shares of STL and residual SMPL will be reduced to Rs 5 paid up shares each. Each shareholder will get one share of Sujana Towers Ltd and Sujana Metals Ltd for holding one share of Sujana Metals ltd (present company).
The Hon’ble High Court of Andhra Pradesh has allowed and approved the scheme of arrangement between the company and M/s Sujana Towers Ltd and Amalgamation of M/s Sujana Steels Ltd with the company on 10th April’07. The proposed de-merger will be effected with retrospective effect from July’2006.
The scheme of arrangement between Sujana Metal Products Ltd (SMPL) and Sujana Towers Ltd (STL) and the amalgamation of Sujana Steels Ltd (SSL) with SMPL will help the company to derive the true value of the company which at present is undervalued.The current paid up equity share capital is Rs 388.3 mn of SMPL consisting of 38.83 mn equity shares of Rs 10 each which will be split equally between STL and SMPL. Simultaneously, the face value of equity shares of STL and residual SMPL will be reduced to Rs 5 paid up shares each. Each shareholder will get one share of Sujana Towers Ltd and Sujana Metals Ltd for holding one share of Sujana Metals ltd (present company).
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Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.
