National Company Law Tribunal’s Mumbai Bench Approves Raymond Ltd's Demerger & Amalgamation Plans

National Company Law Tribunal’s Mumbai Bench Approves Raymond Ltd's Demerger & Amalgamation Plans

The order came after the counsel for petitioner companies pleaded for the approval of the scheme that will have a bearing on issuance of equity shares.

Pranali LotlikarUpdated: Sunday, June 23, 2024, 10:23 AM IST
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Image credit: Raymond (Representative)

Mumbai: The National Company Law Tribunal’s (NCLT) Mumbai bench has allowed the demerger of Raymond Ltd’s (RL) lifestyle business to be carried out by the company and its subsidiaries into Raymond Lifestyle Ltd. The NCLT has also allowed the amalgamation of Ray Global Consumer Trading Ltd with Raymond Consumer Care Ltd.

The order came after the counsel for petitioner companies pleaded for the approval of the scheme that will have a bearing on issuance of equity shares. After going through the produced documents, the tribunal held that the scheme appears to be fair and reasonable and is neither in violation of any provisions of law, nor contrary to public policy.

About The Scheme

According to the scheme, equity shares issued by Raymond Lifestyle Limited (RLL) would be listed on the Bombay Stock Exchange and the National Stock Exchange. Once the scheme becomes effective, the existing RL shareholders would hold the shares of two listed entities, giving them the flexibility to manage their investments in the two businesses with differential dynamics.

As per the scheme presented to the tribunal by the petitioner’s counsel, advocate Hemant Sethi, “The business undertaken by RL (directly and indirectly) comprises lifestyle and non-lifestyle businesses, both with different requirements and operated independently of each other as separate business verticals”.

The requirements of each business, including the terms of capital, operations, knowledge, nature of risk, competitive advantages and strategies, and regulatory compliances are very distinct. Each of these business verticals is significantly large and mature and has a distinct attractiveness to a divergent set of investors, strategic partners, and other stakeholders.

As per the scheme, the demerger will enable both RL and RLL to enhance business operations, resulting in operational synergies and achieving zero net debt for lifestyle business and non-lifestyle business by streamlining operations, more efficient management control and outlining independent growth strategies.

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