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TMI Blog2021 (7) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Scheme provides for demerger from the Appointed Date, viz., 1st April, 2021 in the manner and on the terms and conditions stated in the said Scheme of Arrangement ( Scheme ). A copy of the said Scheme is annexed as Annexure F at page 364 of the application. 2. The circumstances and/or reasons and/or grounds that have necessitated and/ or justified the arrangement are stated in the said Scheme. They are inter alia, as follows: (a) The Demerged Undertaking and the Remaining Undertaking have their own set of strengths and dynamics in the form of nature of risks, competition, challenges, opportunities and business methods, leading to different growth potentials. Hence, segregation of the two undertakings would enable a focused management to explore the potential business opportunities effectively and efficiently; (b) The demerger would result in achieving efficiency in operational processes by designing and implementing independent strategies specifically designed for the two businesses and in optimizing profitability. This would in turn enhance the shareholders' wealth. (c) Targeting and attracting new investors with specific focus and expertise in the two b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Business Undertaking is a debt free unit and has significantly lower working capital requirement as compared to the Compounding Business Undertaking. Hence, demerger of the Compounding Business Undertaking would help in independently managing the different funding requirements of the two business, both in terms of type of funds and amount of infusion required for the businesses. (h) As part of expansion plans for Reprocessing Business Undertaking, the Demerged Company intends to explore chemical recycling and other recycling activities, which are also expected to attract strategic domestic and international investors. (i) Pursuant to the Scheme, the equity shares issued by the Resulting Company would be listed on BSE. Therefore, the existing shareholders of the Demerged Company would hold the shares of two listed entities after the Scheme becoming effective. Such shareholders would then be able to choose whether they want to remain invested in either or both the businesses/operations of the Demerged Company, giving them flexibility in managing their investment in the two businesses having differential dynamics. 3. The instant application has been filed in the first ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said Scheme will not adversely affect the rights of any creditors of the Applicant Companies in any manner whatsoever and due provisions have been made for payment of all liabilities as and when the same fall due in usual course. 12. Learned Counsel of the Applicants also submits that the Scheme is not within the purview of the Competition Act, 2002. 13. Learned Counsel of the Applicants further submits that the Scheme does not provide for corporate debt restructuring and for any compromise with the creditors of the Applicants. 14. Learned Counsel of the Applicants also submits that no proceedings are pending against the Applicant Companies under sections 210 to 217 of the Companies Act, 2013 and that no investigation proceedings are pending against the Applicant Companies. 15. The valuation report of shares of the Applicant Companies for determining the share entitlement ratio, carried out by the Registered Valuer, Mr. Abhinav Agarwal, is annexed to the application as Annexure - M at pages 473-481. Further, fairness opinion issued by the SEBI Registered Category I Merchant Banker providing that the share entitlement ratio is fair and reasonable to the equity sharehol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ramework provided therefor in the Ministry of Corporate Affairs General Circular No. 14/2020 dated 8th April, 2020, as clarified/extended from time to time, including by General Circulars bearing No. 17/2020 dated 13 April 2020, No. 22/2020 dated 15 June 2020, No. 33/2020 dated 28 September 2020 and No. 39/2020 dated 31 December 2020 ( Virtual Meeting Circulars ). g. That at least 30 (thirty) clear days before the date of the said meetings an advertisement convening the same and stating that copies of the said Scheme of Arrangement and the Statement containing necessary details required to be filed pursuant to Section 230 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements Amalgamations) Rules, 2016 is being sent with notice, shall be published once each in The Business Standard (English) and Aajkal (Bengali) as per requirements of Section 230 of the Companies Act, 2013 in Form CAA 2 of the Companies (Compromises, Arrangements Amalgamations) Rules, 2016. h. That in addition, at least 30 (thirty) clear days before the meeting to be held as aforesaid, a notice convening the said meetings at the place/mode and time as aforesaid together with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or by personal messenger. j. Chairperson: Mr. Deepak Khaitan, C.S. (Mob- 9830306692/9007055560) shall be the Chairperson for the said meetings of the shareholders and unsecured and secured creditors of Demerged Company to be held as aforesaid. The consolidated remuneration shall be of ₹ 75,000/- (Rupees Seventy-five thousand only) for conducting the aforementioned meetings. k. Scrutiniser: Mr. Deepak Pandey, Chartered Accountant, Membership no. 30692, (Mob- 9038033777), shall be the Scrutiniser for the said meetings of the shareholders and unsecured and secured creditors of the Demerged Company to be held as aforesaid. The consolidated remuneration shall be of ₹ 60,000/- (Rupees Sixty thousand only) for conducting the aforementioned meetings. l. Quorum and Attendance: The quorum for the said meetings of persons entitled to attend the same shall be determined in accordance with section 103 of the Companies Act, 2013. For the meetings to be held in the Virtual Mode, attendance of such persons in Virtual Mode shall be counted for the purpose of quorum. Attendance at such meetings shall be recorded in the minutes of the meetings instead of taking physical a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Chairperson of the meeting(s) within 3 days of the conclusion of the meeting(s). The Chairperson shall declare the results of the meetings after submission of the reports of the Scrutiniser. The declaration of results by the Chairperson shall also be posted on the website of the Applicant(s) and in case an Applicant does not have a website, the declaration of results shall be published in the same newspapers in which notice of the meetings were advertised. s. The value of each shareholder and creditor shall be in accordance with the books and records of the Applicant and, where entries in the books are disputed, the Chairperson shall determine the value for purposes of the said meetings. t. The resolution for approval of the Scheme of Arrangement put to a meeting shall, if passed by a majority in number representing three-fourths in value of the respective shareholders/creditors casting their votes, as aforesaid, shall be deemed to have been duly passed on the date of such meeting under section 230(1) read with section 232(1) of the Companies Act, 2013. u. That the chairperson do report to this Tribunal the results of the said meetings within 4 (four) weeks from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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