HSIL further builds on customer service excellence with demerger of three business undertakings
Bangalore, November 14th 2017: HSIL Limited in its meeting today approved a scheme of arrangement envisaging demerger of three of its business undertakings into two new entities. The scheme involves:
·Demergerof its Consumer products distribution & marketing business to into newentity Somany Home Innovation Limited (SHIL)
·Demergerof its furniture and Home décor Retail business into SHIL
·Demergerof distribution & marketing business relating to building product intoanother new entity Brilloca Limited which is wholly ownedsubsidiary of SHIL
Theundertakings being demerged are focused on servicing end-consumers in themarket and are involved in branding, marketing, sales, distribution, trading,service etc. Post demerger, HSIL will be a focused excellence ofmanufacturing entity. The segregation & demerger of businesses under theScheme will enable:
·Sharperfocus and better alignment of the businesses to its customers
·Improvedcompetitiveness, operational efficiencies and strengthening of position in therelevant marketplaces
·Optimalmonetization and development of each of the respective businesses, including byattracting focused investors and strategic partners having the necessaryability, experience and interests in the relevant sectors
·Dedicatedand specialized management focus on the specific needs of the respectivebusinesses
·Benefitto all stakeholders, leading to growth and value creation in long run andmaximizing the value and return to the shareholders, unlocking intrinsic valueof assets, achieving cost efficiencies and operational efficiencies
Post demerger,SHIL will issue one equity share each of SHIL, for one equity share held byshareholders of HSIL and SHIL equity shares would be listed on stock exchanges.The appointed date of the Scheme is 1st April 2018. The aforesaid issubject to necessary regulatory approvals including approval from stockexchanges, Hon’ble NCLT.
Mr.Sandip Somany, Vice Chairman and Managing Director, HSIL Limited mentioned that, “Certain key initiatives taken bythe company over last 2-3 years like launch of consumer business has nowstarted reflecting in sales growth and in couple of months the UPVC/ CPVCpipe business and security caps and closure business is also expected to goon-stream. The new capacities created for these are expected to be fullyutilized in next 12-18 months and will further strengthen the product anddistribution portfolio of the company.”
Hefurther stated that, “The scheme of demerger once implemented will significantly unlock thevalue of the respective businesses of HSIL and will support the long termgrowth.”
Board alsoapproved the results for the quarter and half year ended 30th September 2017.Key highlight of the results is continued excellent performance by consumerproducts business with sales growth of 93% and 92% during Q2 and 1st half ofcurrent financial year respectively. Company had launched consumer businessaround two years back and business has demonstrated sales growth over 90%annually since launch. The consumer business product portfolio currentlyconsist of kitchen chimneys, hobs, water heaters, water purifiers, airpurifiers and air coolers. The building products sales growth is 6.7 % duringthe quarter with EBIT growth of 8.6%.