2015 (8) TMI 484 - HC - Companies Law

Scheme of Amalgamation - Dispensing convening of meetings of equity and preference shareholders, secured and unsecured creditors to consider and approve, proposed Scheme of Amalgamation under Sections 390 and 391 Companies Act, 1956 read with Rules 6 & 9 of the Companies (Court) Rules, 1959 Held that - board of directors of transferor companies no. 1 & 2 and transferee company in their separate meetings respectively unanimously approved proposed Scheme of Amalgamation Equity shareholders and debenture holder of transferor company no. 1 & 2 and transferor company have given their consents/no objections in writing to proposed Scheme of Amalgamation and were found in order Direction issued to Transferor company no.1 having 01 secured and 107 unsecured creditors, transferor company no.2 having 10 unsecured creditors and transferee company having 252 unsecured creditors, to hold their meeting to seek their approval to proposed Scheme of Amalgamation Application stands allowed Decided in favour of Applicants.

Summary

Issues:
Application under Sections 390 & 391 of the Companies Act, 1956 seeking directions to dispense with shareholder meetings for amalgamation approval.

Analysis:
The joint application filed under Sections 390 & 391 of the Companies Act, 1956 seeks directions to dispense with the requirement of convening meetings of equity shareholders, debenture holders, and secured creditors of the transferor and transferee companies for the proposed Scheme of Amalgamation. The Scheme aims to merge Ubico Networks Private Limited and Spectranet IT Services Private Limited with Citycom Networks Private Limited to create a single entity with enhanced asset base, revenue, and market share. The share exchange ratio is detailed in the Scheme, specifying the allotment of equity shares post-amalgamation. The Board of Directors of all companies have unanimously approved the Scheme.

The application highlights the consent and no objections from equity shareholders, debenture holder, and creditors of all companies involved. Meetings of secured and unsecured creditors are directed to be held for approval of the Scheme, with appointed Chairpersons and Alternate Chairpersons to conduct the meetings. Quorum requirements for each meeting are specified based on the number and value of creditors. Provisions for adjournment of meetings, consideration of valid proxies, and maintenance of proxy registers are outlined.

Further directions include sending notices of meetings along with Scheme details to creditors, publishing notices in newspapers, and ensuring fair conduct of meetings. Chairpersons and Alternate Chairpersons are empowered to issue suitable directions to ensure just and fair proceedings. The fee for Chairpersons and Alternate Chairpersons is fixed, and they are required to file reports post-meetings. The application is allowed in the stated terms, concluding the judgment.