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Ashok Leyland has got its board's approval for its proposal of amalgamating Hinduja Foundries Limited, a Hinduja Group company, with Ashok Leyland Limited, subject to various regulatory approvals and approval of shareholders of both the companies.
NEW DELHI: Hinduja Foundries is in the business of grey iron castings and supply of automotive components.
The board of directors also approved (subject to regulatory approvals) the exchange ratio in the following manner: 100 equity shares of Rs 10 each fully paid of Hinduja Foundries Limited will get 40 equity shares of Rs 1 each fully paid of Ashok Leyland Limited.
Further, 1,000 of Hinduja Foundries Limited's 2008 series GDRs will get 133 equity shares of Rs 1 each fully paid of Ashok Leyland Limited.
Also, one 2016 series GDRs of Hinduja Foundries Limited will get 4,800 equity shares of Rs 1 each fully paid of Ashok Leyland Limited.
The appointed date for the proposed amalgamation is October 1, 2016.
Vinod K Dasari, chief executive officer and managing director, Ashok Leyland, said that the amalgamation will result in operational efficiencies and help realise significant cost synergies.
"We are confident that the roll out of the best practices of Ashok Leyland Limited will benefit Hinduja Foundries Limited. While it is a critical supplier to Ashok Leyland Limited, it will continue its focus to grow its relationships with other customers," said Dasari.
He added that, in fact, the new arrangement will help in providing a wider range of solutions to them. "There is so much more Hinduja Foundries can do under the new arrangement," he said