The National Company Law Tribunal has approved the spinoff of Thermax Ltd.'s wholly owned subsidiaries — Thermax Cooling Solutions Ltd. and Thermax Instrumentation Ltd.
The scheme of arrangement between TCSL and TIL, along with their respective shareholders, has been officially approved by the board of directors of both companies. The appointed date for the implementation of the scheme is set as April 1, 2023, marking the commencement of the process, according to an exchange filing on Tuesday.
The share capital of TCSL will be reduced without any payment or consideration to the shareholders. The reduction involves changing the face value from Rs 10 to Rs 5 per equity share, and the paid-up value per equity share will also be reduced accordingly, according to the NCLT order dated Dec. 20.
In simpler terms, when the business of TCSL is transferred to the new TIL, the new company has to give something valuable to the existing shareholders of TCSL as part of the deal.
What they are giving is a type of shares called '10% redeemable preference shares'. For every 1,000 shares that a person currently holds in TCSL, they will get 85 of these new shares from the new company. Each of these new shares is worth Rs 100 and they are considered already paid for. Therefore, shareholders of TCSL won't have to pay anything extra to get these new shares.
TCSL is primarily involved in providing various wet and dry-cooling solutions for heat removal in diverse manufacturing industries. TIL specialises in providing services like commissioning, civil works, and operation and maintenance for turnkey contracts related to power plants.
Shares of Thermax were trading 1.61% lower at Rs 3,093.10 apiece on the NSE compared to a 0.33% advance in the benchmark Nifty 50 at 1:04 p.m.
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