PC Jeweller LTD (PCJL) have received permission from the board for demerger of the company's export division and amalgamation of the same with its wholly-owned subsidiary PCJ Gems & Jewellery Ltd.
According to a regulatory filing, “...the board of directors of the company in its meeting held yesterday i.e. May 11, 2019, has considered and approved the scheme of arrangement for demerger of 'export division' (demerged undertaking) of PC Jeweller Ltd (demerged company) and subsequent amalgamation of the same with its wholly owned subsidiary company i.e. PCJ Gems & Jewellery Ltd.”
The demerger will be effective once various approvals and sanctions from National Company Law Tribunal (NCLT) of relevant jurisdiction, Sebi, stock exchanges, shareholders and others are obtained. The balance sheet revealed that the export division generated a turnover of 2,690.37 crore as on March 31, 2018, which is 28.35 per cent of PCJL's turnover.
It has been noted by the board of the demerged company that the commercial activities of both the verticals are varied and distinct from each other. “In order to ensure sustainable long-term growth, profitability, market share and continuous customer service, both require focused management attention, different sets of skills and resources to meet competitive, regulatory environment and to mitigate risks. In consideration of the demerger of the 'export division' all the shareholders of PCJL will get shares of the resulting company on the basis of share entitlement ratio, as defined in the scheme of arrangement and the shares of the resulting company will also be listed as per the provisions of this scheme and subject to the applicable compliances and regulatory approvals," it said.