EMC to merge with Williamson Magor engineering subsidiaries

Industry:    2016-03-23

The BM Khaitan-controlled Williamson Magor Group’s engineering arms and transmission tower maker EMC Ltd are being merged to create a giant engineering joint venture with a turnover of Rs 6,000-7,000 crore. According to a notice sent to stock exchanges, EMC, McNally Bharat Engineering (MBEL) and McNally Sayaji Engineering (MSEL) will merge into Kilburn Engineering. While EMC is controlled by Manoj Toshniwal, Williamson Magor group owns MBEL, MSEL and Kilburn Engineering. According to some sources, the merged entity will be jointly run by the Khaitans and Toshniwal. The Khaitans and Toshniwal declined to comment on the issue. If approved, the merged entity will become a complete solution provider for power plants as well as power transmission units, material handling and specialised drying equipment. Analysts tracking Williamson Magor said the move seems to be in line with the Khaitans’ decision to induct EMC as strategic partner into McNally Bharat some months ago, so that the duo can collectively capitalise on the huge business opportunity in the engineering field and provide an integral engineering and construction solution to its customer. They said the two parties decided to make Kilburn Engineering the holding company primarily because it does not have any crossholdings. EMC holds about 30% of McNally Bharat Engineering’s equity capital, while McNally Bharat holds shares of McNally Sayaji. The Khaitans and the Toshniwals have decided to form a committee with representatives from the companies being merged. The committee will “evaluate the options for the merger, draft the amalgamation scheme as well as appoint merchant bankers and valuers to help work out the share swap ratio for the proposed merger”, one of the sources said. Shareholding of Khaitans and Toshniwals in Kilburn Engineering will depend on the share swap ratio to be determined by the committee, the person added. Kilburn Engineering posted a turnover of Rs 120 crore for 2014-15, McNally Bharat posted Rs 2,100 crore, McNally Sayaji Rs 200 crore and EMC Rs 3,500 crore.

print
Source: