Early last month, Indo Asian Fusegear hads said that they were looking at renewable energy and of their interest to get into power generation.
They had then talked about solar, thermal and hydro and of their plans to take some initial steps in this field in this year.
Indo Asian Fusegear Limited (IAFL) announced the demerger of its metering, institutional business and proposed power business from the company, for unlocking shareholder value and tapping further growth opportunities.
The Board of Indo Asian Fusegear Limited (which is engaged in manufacture of lighting and lighting accessories, wires & cables, energy meters etc.), has approved the demerger of its metering, institutional and proposed power business to Advanced Metering Technology Limited (AMTL), from April 01, 2011.
Commenting on the company’s plan of demerger, Mr. V P Mahendru, CMD, Indo Asian Fusegear Limited, said, “The company sees good potential of growth in renewable energy power generation viz. wind and solar power and is already in talks with various companies for acquisition / JV etc. The company also has plans to venture into the production of new innovative LEDs and energy conservation Lighting Controls and products for improving cost efficiencies, services and performance for its customers”.
After demerging our Metering, Institutional Business and proposed Power business into a separate company, we foresee faster growth for Wires, Cables, Wiring Accessories and Power Conservation products for which investments are allocated for adopting new products and new designs. These businesses will develop in scale and market on the new upgraded platform of technology which we have already built for LED lighting sources and luminaires and other power conservation controls including energy conservation controls for Street Lighting. These businesses will grow faster with these new technologies as they are attracting new JV partners.
Commenting on the demerger, Mr P K Ranade, Jt. Managing Director, IAFL said, “The demerger is being carried out to provide AMTL more opportunities for strategic partnerships. The move would also help AMTL in deriving greater flexibility in fund raising capability for future growth. The demerger would result in issuance of equity shares to the shareholders of IAFL in such a manner that all the shareholders become shareholders in the two companies, the face value of the shares of Rs.10/- each will become face value of Rs.5/- each of both the companies, thereby resulting in unlocking and maximising shareholders value.
The valuation of the shares of Indo Asian Fusegear Ltd. and Indo Asian Marketing Ltd. were done by adopting the standard and accepted valuation methods. It was established that Indo Asian Fusegear Ltd. shares would be valued at Rs. 128.20 per share and Indo Asian Marketing Ltd. shares to be valued at Rs. 86.30 per share resulting into a swap ratio, where Indo Asian Marketing shareholders receive 7 equity shares of Indo Asian Fusegear Ltd. against 10 shares of Indo Asian Marketing Limited.