The board of directors of Max Ventures and Industries has approved the scheme of amalgamation with Max Estates and their respective shareholders and creditors.
In the deal, Max Ventures is the transferor company, while Max Estates is the transferee.
Notably, Max Estates is currently the wholly-owned subsidiary of Max Ventures.
As of December 2021, Max Ventures’ revenue from operations stands at ₹15.37 crore with total assets worth ₹902.49 crore. Meanwhile, Max Estate has revenue from operations at ₹22 crore with total assets aggregating to ₹689.62 crore.
Under the scheme, Max Estates will issue its equity shares to the equity shareholders of Max Ventures.
The equity shares issuance will be – for every 1 equity share having a face value of ₹10 each held in Max Ventures as on the record date, the equity shareholders of Max Ventures shall be issued 1 equity share of the face value of ₹10 each credited as fully paid-up in Max Estates.
Upon the scheme coming into effect, Max Estates will issue equity shares basis the shares entitlement ratio to the equity shareholders of Max Ventures as on the record date.
With that, the company in its regulatory filing on Tuesday said, “Max Ventures will automatically get dissolved without being wound up.”
Further, the shares held in Max Ventures in Max Estates shall be extinguished and cancelled as the date scheme becomes effective.
It said, “Management deliberated that the Scheme is a part of an overall re-organization plan to rationalize and streamline the existing group structure.”
Here’s how the management expects Max Ventures and Max Estates to benefit from the amalgamation as per the filing:
1. The amalgamation would lead to simplification of the existing holding structure and reduction of shareholding tiers to remove impediments, if any, in facilitating future expansion plans and creating enhanced shareholder value.
2. Consolidation of businesses presently being earned on by the Max Ventures and the Max Estates which shall create greater operational synergies and efficiencies at multiple levels of business operations and shall provide significant impetus to their growth.
3. The Amalgamation would result in financial resources being efficiently pooled, leading to centralized and more efficient management of funds, greater economies of scale, and a bigger and stronger resource base for future growth, which are presently divided into two separate corporate entities within the group.
4. Pooling of proprietary information, personnel, financial, managerial, and other resources, thereby contributing to the future growth of the merged entity.
5. Max Ventures and Max Estates operate businesses that complement each other and therefore, can be conveniently combined for the mutual benefit of the shareholder.
6. Simpllclty in working, reducing various statutory and regulatory compliances and related costs, which presently have to be duplicated, reduction in operational and administrative expenses and overheads, better cost and operational efficiencies and it would also result in coordinated optimum utilization of resources.
7. This Scheme shall be in the beneficial interest of all the stakeholders including the shareholders of Max Ventures.
On BSE, Max Ventures shares closed at ₹116.50 apiece down by 3.5%.