The Rane Group has taken a significant step towards simplifying its group structure and enhancing operational efficiencies. The Boards of Directors of Rane (Madras) Limited (RML), Rane Brake Lining Limited (RBL), and Rane Engine Valve Limited (REVL) have unanimously approved a proposed reorganisation through a scheme of arrangement, leading to the merger of RBL and REVL into RML.
The merger, subject to necessary regulatory approvals including those from SEBI, stock exchanges, shareholders, creditors, and the National Company Law Tribunal (NCLT) in Chennai, is expected to take around 9 to 12 months for implementation.
Upon the scheme becoming effective, RBL shareholders will receive 21 fully paid-up equity shares of RML for every 20 fully paid-up equity shares of RBL held by them as of the record date. Similarly, REVL shareholders will receive 9 fully paid-up equity shares of RML for every 20 fully paid-up equity shares of REVL held by them as of the record date.
The entitlement ratio has been determined based on the recommendations of independent valuers, ensuring a fair and transparent process for all stakeholders involved.
The strategic rationale behind the reorganisation is to bring all operating business subsidiaries under a single entity, simplifying the group structure and aligning public shareholders' interests by converging their stake at a single listed entity. This move aims to capture the full value of the listed operating businesses of the group, unlocking synergies across product lines and enhancing operational and financial efficiencies through scale.
The merger is expected to create a larger entity with a combined turnover of INR 3,373 crore for the trailing twelve months period ended December 31, 2023, on a proforma basis. This consolidation is seen as a strategic move to increase flexibility in raising capital for growth pursuits, both organic and inorganic.
Commenting on the transaction, L Ganesh, Chairman of the Rane Group, stated, 'Today marks an important day in our journey to create value for our stakeholders. The merger will help unlock various synergies among the businesses and will enhance stakeholder value for the long term.'
Harish Lakshman, Vice Chairman of the Rane Group, added, 'This reorganisation scheme demonstrates our commitment to take actions that create value for our shareholders. The transaction simplifies the group structure by bringing together listed operating businesses and creating a platform that is well poised for the next phase of growth.'