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Indo Gulf and Birla Global to merge with Indian Rayon
By agencies
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Monday, 12 September 2005, 19:30 IST
MUMBAI: IndiaÂ’s largest commodities business house the Aditya Birla Group has decided to merge its group companies Indo Gulf Fertilizers and Birla Global Finance with Indian Rayon.
After the merger, Indian Rayon will be rechristened Aditya Birla Nuvo, and will have consolidated revenues, including that of subsidiaries, of Rs 60 billion in financial year 2005-06.
The group has announced a swap ratio of 1:3, under two separate restructuring schemes. This will mean that shareholders will get one share of Indian Rayon for every 3 shares of either Birla Global Finance or Indo Gulf Fertilizers.
Group chairman Kumarmangalam Birla announced the merger on Sunday after the boards of the three companies met to finalize the restructuring plan.
Revenues from the “value businesses”, including viscose staple fiber, textiles, carbon black and insulators, will be channelized to fund “high growth businesses” like IT, ITeS, telecom, garments and life insurance, said Sanjeev Aga, MD, Aditya Birla Nuvo.
The financials of the new company will give it a significantly higher borrowing capacity, Aga added. The merged company will also be an integrated financial services company. New opportunities in financial services, high-end insurance products and asset management can be explored. The group may also foray into banking once the regulations permit, Birla added.