B.M. Khaitan Group-controlled Williamson Magor Group announced a major recast of engineering companies in its fold to consolidate its operations.
The plan is to merge three engineering companies with a group entity, bringing all the engineering companies under one corporate entity.
Under the proposal, Mcnally Bharat Engineering Co Ltd (MBEL), its subsidiary Mcnally Sayaji Engineering Limited. and EMC Limited would be merged with Kilburn Engineering Limited (KEL).
The Boards of MBEL and KEL have approved the merger proposal in-principle.
The Boards agreed to form a committee with a representative from each company to supervise the preparation of a draft Scheme of Amalgamation and appoint professionals to determine the share exchange ratio.
CumbersomeIt was learnt that the aim of the exercise was to consolidate the group’s engineering operations.
If the merger went through, KEL would be the biggest company in the B.M. Khaitan Group with revenue of about Rs. 7,000 crore.
Though MBEL was bigger than Kilburn it had cross holdings with group companies which would make a merger cumbersome.
“Kilburn was considered clean,” a source said. While MBEL and Kilburn are listed, none of the other companies involved in this exercise are listed entities.
The major companies in the Williamson Magor Group are dry-cell battery maker Eveready Industries India Ltd., bulk tea producer Mcleod Russel India Ltd. and the engineering companies.
Although MBEL was leading the engineering business, operating mainly in the infrastructure space, it fell into bad days owing to the slowdown in the economy and the less-than anticipated government spends on infrastructure.
Joint managementRecently, the Khaitans had roped in transmission tower-maker EMC as a strategic partner, which bought a 29.6 per cent stake in MBEL.
Indications are the Khaitans and the EMC promoters would jointly run the engineering business once the merger got the necessary approvals.
