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McDowell to merge 8 firms, eyes a top Scotch label
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Saturday, 01 October, 2005, 08 : 00 AM [IST]
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Our Bureau, Mumbai
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McDowell & Company, the flagship firm of the UB group, will merge eight firms of the group with itself.
The firms to be merged are Phipson Distillery (PDL), United Spirits Ltd (USL), Herbertsons (HL), Triumph Distillers and Vintners (TDV), McDowell International Brands (MIBL), Shaw Wallace Distilleries (SWDL), Baramati Grape Industries (Baramati) and United Distillers India Ltd (UDIL).
The following swap ratios have been approved for the merger: shareholders of Herbertsons will receive 2 shares of McDowell for every 3 shares they held, shareholders of TDV will get 83 shares of McDowell for every 4 shares, shareholders of Baramati will get 31 shares of McDowell for every 20 shares, shareholders of UDIL will receive 3 shares of McDowell for every 100, and shareholders of SWDL will get 7 shares of McDowell for every 20 shares.
The share exchange ratio has been determined based on the recommendation of two independent valuers-KP-MG India and Haribhakti & Co, chartered accountants. Further, the investment business of McDowell & Company would be demerged to McDowell India Spirits (MISL).
McDowell shareholders will receive 1 equity share of MISL of Rs 10 each for every five equity they held. MISD will be renamed as McDowell Holdings. The McDowell board approved the scheme for merger of Asian Opportunities and Investments (AOIL) and Zelinka Ltd (Zelinka) into the company.
The company is also planning to seek shareholder's permission to increase the FII investment limit to 49 per cent from 24 per cent and the existing borrowing limit five-fold to Rs 5,000 crore.
Sources in the company said that the McDowell board would meet soon to consider various proposals of raising funds, including equity-linked instruments. The board will also consider increasing the authorised share capital.
The company required more funds to finance expansion opportunities in global markets. "Strategic moves to acquire one of the top Scotch labels in the world are being considered," the sources added.
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