Paper and packaging board company JK Paper Ltd (JKPL) on Friday (December 13) said its board of directors has approved a composite scheme of arrangement aimed at consolidating its subsidiaries and expanding its market footprint.
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“The Board of Directors of JK Paper Ltd (JKPL) in its meeting held today approved a Composite Scheme of Arrangement (Scheme) of, inter alia, JK Paper Ltd and Horizon Packs Private Ltd, Securipax Packaging Private Ltd, JKPL Utility Packaging Solutions Private Ltd which are wholly owned subsidiaries (WOS) of JKPL and Enviro Tech Ventures Ltd,” JK Paper said in a regulatory filing.
The scheme, approved in Friday’s meeting, involves the merger of three wholly-owned subsidiaries — Horizon Packs Private Ltd, Securipax Packaging Private Ltd, and JKPL Utility Packaging Solutions Private Ltd — into JK Paper Ltd.
Also Read: JK Paper Q2 Results | Net profit slumps 58% to ₹129 crore, revenue up 2% to ₹1,683 crore
The subsidiaries, which are engaged in manufacturing packaging products and solutions, will be integrated into JKPL, resulting in a more streamlined and competitive entity in the paper and packaging sector. Additionally, under the scheme, the Sirpur Paper Mills Ltd will become a direct subsidiary of JKPL.
The scheme is subject to the receipt of requisite approvals from the stock exchanges, the Securities and Exchange Board of India (SEBI), the National Company Law Tribunal (NCLT), other statutory and regulatory authorities under applicable laws, respective companies’ shareholders and creditors. The transaction is expected to be completed in 12 months subject to regulatory approvals.
Separately, the board also approved the acquisition of a majority stake in Radhesham Wellpack Private Ltd (RWPL). JKPL entered into a share purchase and shareholders’ agreement (SPSHA) for the acquisition of 60% shares of RWPL upfront with the balance of 40% to be acquired within a period of two years as per the SPSHA.
Also Read: JK Paper hopes to maintain margin at 22-23%
RWPL is engaged in the business of manufacturing corrugated boxes, corrugated sheets, and other corrugated packaging-related work/products. Corrugated packaging is a rapidly-growing segment in the Indian paper and packaging industry driven by growth in end-use industries.
Shares of JK Paper Ltd ended at ₹455.20, down by ₹11.65, or 2.50%, on the BSE.
(Edited by : Shoma Bhattacharjee)
