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| Exchange Disseminated Time | Celebrity Fashions Ltd has informed BSE that the Board of Directors of the Company at its meeting held on March 03, 2010, approved the demerger of the domestic business of the Company into Indian Terrain Fashions Ltd. (ITFL). The Board also accorded their approval for hiving off the Company's Bottoms Division to Celebrity Clothing Ltd. (CCL), a subsidiary of Celebrity Fashions Ltd. (CFL) by way of Slump Sale on a going concern basis.
The demerger and hiving off would be in accordance with Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956 (the Scheme). The Scheme is subject to necessary approvals / sanction of the concerned authorities including Stock Exchanges, Hon'ble High Court of Madras, Registrar of Companies, Shareholders and Creditors.
The Scheme further envisages the following:
1. Fair valuation of the assets of CFL as on March 31, 2010 (subject to approval of High Court)
2. Write off of accumulated losses in CFL against the Securities Premium Account to the extent available and / or against the General Reserves / Capital Reserves (if any).
Pursuant to the Scheme, the existing shareholders of CFL will be issued 2 (Two) new equity shares of Rs. 10/- each of ITFL, for every 7 (Seven) shares of Rs. 10/- each in CFL, in addition to their existing shareholding in CFL.
CCL, a subsidiary of CFL, upon hiving-off will issue 1,00,00,000 (1 Crore) equity Shares of Rs. 10/- each to CFL as net consideration for the transfer of assets and liabilities.
The Appointed Date for the transaction is January 1, 2010 subject to the approval of High Court.
Upon the Scheme becoming effective (on approval of the High Court), the shares of ITFL will be listed in BSE and NSE.
CCL will remain unlisted and a subsidiary of CFL.
In this regard, the Company has issued a Press Release highlighting the above proposal.
Press Release:
"Celebrity Fashions Ltd (CFL) today has announced a major business re-structuring scheme:
- Demerger of Domestic Business into Indian Terrain Fashions Ltd (ITFL)
- Transfer of Bottoms Division of Exports into Celebrity Clothing Ltd (CCL) by way of Slump Sale on a going-concern basis
The re-structuring would be in accordance with the Scheme of Arrangement under Sections 391 - 394 of the Companies Act, 1956 and subject to the necessary approvals / sanction of concerned
authorities, including Stock Exchanges, Hon'ble High Court of Madras, Registrar of Companies, Shareholders and Creditors.
The Company further proposes to fair value its assets as on March 31, 2010 and write off
accumulated losses against the Securities Premium Account and / or General / Capital Reserves to the extent available.
Pursuant to the Scheme, the existing shareholders of CFL will be issued 2 (Two) new equity
shares of Rs.10/- each in ITFL for every 7 (Seven) shares of Rs.10/- each held in CFL in addition
to their existing shareholding in CFL.
CCL, a subsidiary of CFL will issue 1,00,00,000 (1 crore) equity shares of Rs.10/- each to CFL
as net consideration for transfer of assets and liabilities.
Post Demerger, the shares of ITFL will be listed in BSE and NSE.
CCL will remain an Unlisted Company and subsidiary of CFL.
The Appointed Date of Transaction is January 1, 2010.
CFL, a Rs.250 cr Company, is in the business of manufacturing and exporting ready-made garments. The Company has a national presence under the brand "Indian Terrain". The Exports Division of CFL is further divided into Tops and Bottoms Division.CFL to enhance the capability and focus on divisions catering to different markets / products sensed the need to manage them as independent entities. Further, it was felt, that separating the divisions will also provide greater flexibility in carrying out the operations.
CFL seeks to enable the respective businesses to achieve their full potential, pave the way for infusion of funds by financial / strategic investor in respective businesses, thereby, ultimately leading to maximizing the Enterprise Value.
The advisors to the proposed re-structuring are SBI Capital Markets Limited, Mumbai and Price Waterhouse Coopers Pvt. Ltd, Bangalore." |
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