The Board of Directors of Hercules Hoists Limited (HHL) at their meeting held today approved the Scheme of Arrangement between the Hercules Hoists Limited (HHL) and Indef Manufacturing Limited (“Resulting Company” or “IML”) and their respective shareholders and creditors under applicable provisions of the Companies Act, 2013 (“Act”) (“Scheme”) which inter alia, provides for demerger, transfer and vesting of the Demerged Undertaking (as defined in the Scheme) from the Company into the Resulting Company on a going concern basis.
HHL is engaged in the business of manufacturing, sales, service, distribution, and marketing of mechanical hoists, electric chains hoists, wire rope hoists and other material handling equipment’s (‘Manufacturing Business’’) and other business by way of investments in various mutual funds schemes and equity instruments.
IML was incorporated on September 12, 2022, which is unlisted and wholly owned subsidiary of the HHL, with a view to undertake the business of manufacturing hoists, cranes and other material handling equipment’s.
The demerger will result into splitting of manufacturing business and investment business of the Demerged Company with a view to unlocking value, enhance the scope of work of both, the Demerged Company and the Resulting Company, and further to draw new investors, JV, bringing technology partner, merger & acquisition for exploring other growth potential in it.
The Scheme will ensure focused management attention, resources and skill set allocation of both HHL and IML of Remaining Undertaking and Demerged Undertaking respectively with a view to rationalize and simplify the structure of the Demerged Undertaking.
In consideration of the Demerger, the Shareholders of the Demerged Company will receive equity shares in the Resulting Company, which will be listed on Stock Exchange(s). The Shares held by the Demerged Company in the Resulting Company (if any) will be cancelled upon the effectiveness of the Scheme as the shareholding pattern of the Demerged Company and the Resulting Company will be exactly the same (i.e mirror shareholding pattern).