Press Releases

Date: June 13, 2003
Mumbai

Nicholas Piramal moves to enhance shareholder value - To transfer its shareholding in Gujarat Glass to a holding company

In a move designed to enhance value in both Nicholas Piramal India Ltd. (NPIL) and its subsidiary Gujarat Glass Pvt. Ltd. (GGPL), the Board of Directors of Nicholas Piramal India Limited (NPIL) has today taken an in-principle decision to transfer GGPL shares (constituting 53.8% holding) held by NPIL to NPIL’s shareholders through a new Holding Company (NHC). The move is expected to optimize gains for shareholders of both NPIL and GGPL.

This will be done under a Scheme of Arrangement u/s 391/394 of the Companies Act, 1956. The above decision of the Board is subject to all applicable approvals.

Explaining the rationale for the move, NPIL’s Chairman Mr. Ajay Piramal said: “NPIL will now focus on pharma, with improved consolidated financials, conserving its capital outlay for its intellectual-asset intensive business. This move will enable NPIL to vigorously pursue its growth strategy in its core pharmaceutical business. Gujarat Glass will be independent to pursue its future plans in the Flaconnage sector.

The shares of the NHC would be offered, free of cost, to the shareholders of NPIL in proportion to their shareholding in NPIL and would be listed on the stock exchanges on which NPIL shares are listed i.e. The Stock Exchange, Mumbai, The National Stock Exchange and the Ahmedabad Stock Exchange.

As a result of the Arrangement, NPIL’s consolidated financials will improve with an enhanced investment capability to capitalize on opportunities in its core pharma business. If FY2003 consolidated financials were to be reworked excluding Gujarat Glass, the following are the significant financial indicators:

Gujarat Glass is among the top three Flaconnage companies in the world in terms of volume, besides being the leader in the domestic market. It makes about 7 million containers a day and its manufacturing facilities are comparable with the best in the world. During FY 2002-03 GGPL’s gross sales on a consolidated basis (GGPL, Ceylon Glass Ltd. and GG USA Inc. put together) were Rs. 3064.9 million while Profit After Tax was Rs. 50.1 million.

"Gujarat Glass has a promising outlook for growth in the coming years, with exports on the top of its agenda. The company’s cost structures are extremely competitive in global terms, possibly among the lowest in the world. This, coupled with its highly skilled technical manpower, gives the Company an edge over the global majors in the Flaconnage industry. We, the promoters, are committed to growing the company and creating value for the shareholders," Mr. Piramal explained.

Enam Financial Consultants Private Limited was advisor to the scheme of arrangement.

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