Ballarpur Industries Limited

Ballarpur Industries Limited

The Board of Directors of Ballarpur Industries Limited (BILT) announced a scheme of arrangement and reorganization whereby the undertakings of the company comprising Assets and Liabilities pertaining to the Units of the company at Bhigwan, Ballarpur and Kamalapuram be hived off into a wholly owned subsidiary called BILT Graphic Paper Products Limited (BGPPL) through a ‘Slump Exchange’ through a Court scheme.

The consideration for the transfer would be Rs.1, 950 crores and will be satisfied by issue of shares of Rs.450 crores and Non-Convertible Debentures of Rs.1, 500 crores by BGPPL to BILT.

Within 40 days of the effective date (court approval) BILT will transfer for a consideration of Rs.1, 950 crores Shares / Debentures in BGPPL to Ballarpur Paper Holdings BV (BPH) incorporated in Netherlands in connection with the acquisition of Sabah forest Industries Malaysia (SFI). BPH is a 100% subsidiary of Ballarpur International Holdings BV (BIH), which is 80% subsidiary of BILT. The Balance 20% is beneficially owned by JP Morgan.

BPH will raise long-term debt and private equity to fund the above acquisition. BPH has already received indicative term sheets for debt and private equity from Banks / Institution of repute.

BILT will use Rs.940 crores (approx.) of the consideration to compulsorily buy-back 40% equity shares from all shareholders on a mandatory basis.

The buy-back price will be Rs.125/- per share. Balance consideration will be used for retiring debt.

Before effecting buy-back the company will split the shares into’5’ shares of face value of Rs.2/-and the buy-back will be effected for ‘2’ shares of face value of Rs.2/- at a price of Rs.25/- per share.

As a goodwill measure and in the interest of those small Shareholders owning shares up to 1,000 shares (pre-split) and 5, 000 shares (post-split), who opt to offer the entirety of the shareholding, the residual 60% of the shareholding will be bought back at Rs.30/- per share of the face value of Rs.2/-per share(Post-split).

The share capital of the company will get reduced to 10.71 crores shares from 18.61 crores shares post buy-back.

The buy-back as is conditional upon the approval of the Scheme of arrangement and reorganization in its entirety

Post the approval of Scheme the Shareholders of BILT will continue to control the entire paper & pulp operations of BILT through its step down subsidiaries viz., BGPPL and SFI.