GHCL climbs 3 per cent on getting nod from shareholders & creditors for demerger

On Friday, the shares of GHCL, India's leading chemical & textile company were trading higher by 3 per cent intraday after it announced that secured creditors have approved the scheme of demerger of its inorganic chemicals & textile businesses.  

As part of the restructuring proposal (announced in March 2020), the company’s textile business was to be demerged into a separate company with both businesses listed as separate business entities. Earlier this year in April, the shareholders & unsecured creditors had approved the scheme of demerger, and now, with the approval of even the secured creditors, the company will approach National Company Law Tribunal (NCLT) for their approval.  

The proposed demerger is likely to deliver various operational and strategic benefits to each business segment such as focussed growth, concentrated approach, business synergies, and increased operational as well as customer focus. It is expected to address independent business opportunities with efficient capital allocation and attract a different set of investors, strategic partners, lenders & other stakeholders. This is likely to result in enhanced value creation for the stakeholders.  

Commenting on the development, RS Jalan, Managing Director, GHCL stated that the demerger will go a long way in facilitating better opportunities, focus, and business synergies for both businesses.  

At 3 pm on Friday, the stock of GHCL Limited was trading at Rs 292.95, higher by 3.44 per cent or 9.75 per share as against a 0.32 per cent decline in the benchmark index.  The 52-week high and the 52-week low of the scrip were recorded at Rs 302.40 and Rs 135.25, respectively on BSE.