Modilac Private Limited to become new entity for Nutraceutical Business; Meetings of shareholders and creditors to be held via video conferencing.
In a significant development, the National Company Law Tribunal (NCLT) Allahabad Bench has approved the First Motion Application filed by G S Pharmbutor Private Limited (Demerged Company) and Modilac Private Limited (Resulting Company) under Sections 230 and 232 of the Companies Act, 2013, for the demerger of the Nutraceutical Business. The judgment, delivered by Members Ashish Verma and Praveen Gupta, paves the way for strategic realignment and enhanced focus for both entities.
The proposed Scheme of Arrangement aims to transfer the Nutraceutical Business of G S Pharmbutor Private Limited to Modilac Private Limited on a going concern basis. The Tribunal has highlighted the benefits of the demerger, which include sharper strategic focus, efficient management, and optimal resource utilization.
As part of the judgment, the Tribunal has directed the convening of meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors of the Demerged Company through video conferencing with remote e-voting. However, the meetings for the Equity Shareholders and Unsecured Creditors of the Resulting Company have been dispensed with, owing to the consent affidavits obtained from all concerned parties.
The Tribunal has appointed Mr. Adarsh Bhushan as the Chairperson and Mr. Bharat Mishra as the Co-Chairperson for overseeing the conduct of these meetings, along with Mr. Anil Kumar as the Scrutinizer. The fees for these appointments, along with other expenses, will be borne by G S Pharmbutor Private Limited.
Furthermore, the judgment mandates that notices for these meetings be sent 30 days in advance, accompanied by details of the Scheme and explanatory statements. An advertisement is also to be published in prominent newspapers, ensuring transparency and accessibility of information related to the demerger.
The demerger is expected to allow Modilac Private Limited to attract strategic partners and investors, thereby aligning with its independent value creation trajectory. The judgment assures that the Scheme is not prejudicial to the interests of stakeholders or the general public, as certified by statutory auditors and validated by a thorough valuation report.
Both companies are required to comply with the directions of the Tribunal, including furnishing copies of the Scheme to stakeholders upon request and ensuring adherence to legal provisions.
The judgment marks a significant step forward for the involved parties, setting a precedent for future corporate restructuring endeavors. The Second Motion petition is to be filed within seven days post-report submission by the Chairperson, ensuring timely progression towards final approval of the Scheme.
Bottom Line:
Companies Act, 2013 - Demerger and Scheme of Arrangement - First Motion Application for approval of Scheme of Arrangement under Sections 230 and 232 of the Companies Act, 2013 - Dispensation of meetings of shareholders and creditors where consent affidavits are obtained - Directions for convening and conducting meetings of shareholders and creditors through video conferencing with remote e-voting.
Statutory provision(s): Companies Act, 2013 Sections 230, 232, 133, 103, 230(6), 230(7), 232(3), Rule 3 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, Rule 16 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.
G S Pharmbutor Private Limited, (NCLT)(Allahabad Bench) : Law Finder Doc Id # 2822072
