Crompton Greaves to demerge consumer products business

New Delhi: Crompton Greaves (CG) said its board has decided to fully demerge its consumer products business.

"The Board has now reconsidered and approved the contours of the proposed demerger and decided to implement a 100 percent demerger of the consumer products business, such that the shareholding pattern of the resulting consumer company shall mirror the shareholding pattern of CG," the company said in a BSE filing.

Crompton Greaves said that the Board of Directors of the company at its meeting held on 19 February 2015 based on comments received from the SEBI, the stock exchanges and investors’ feedback, evaluated salient aspects of the Scheme of Arrangement with respect to demerger of the Consumer Products business of the company.

A scheme of arrangement incorporating the above principles will soon be considered by the Board of Directors, it added.

In July 2014, the company’s Board proposed to demerge its consumer products business unit into a separate listed entity.

The Board believes that such a demerger will create better growth opportunities for its two large but significantly different businesses - power, industrial and automation which is a B2B business, and the consumer products business which is B2C, the filing said.

The Board also believes that this will create a more flexible capital structure for the two businesses to grow independently, allow them to pursue more ambitious strategic goals and, thus, create further value for existing shareholders.

PTI