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HLL-Pond's merger okayed with retrospective effect

The merger of Pond's (India) Limited with Hindustan Lever Limited was accomplished today, with retrospective effect from January 1, 1998, which is the appointed date for the merger under the scheme of amalgamation.

HLL today filed with the Registrar of Companies, Maharashtra, the drawn up order of the Bombay High Court over four weeks after the court approved the amalgamation on September 10, 1998.

PIL had already filed the drawn up order of the high court of Madras, with the Registrar of Companies, Tamil Nadu, on September 23, 1998, over six weeks after the high court of Madras approved the amalgamation on August 7, 1998.

Clause 1.5 of the scheme stipulated that the later of the two dates of filing of the court orders will be the effective date of the merger. Hence the effective date of the amalgamation is October 15, 1998, retrospective from January 1, 1998.

The company petition filed by HLL before the Bombay high court and that filed by PIL before the Madras High Court were approved unopposed by any party, reflecting the overwhelming support and approval for the merger proposal.

With the filing of the drawn up orders, the assets, liabilities and business of PIL have become the assets, liabilities and business of HLL. Necessary steps are being taken to implement the provision of the scheme of amalgamation.

As a first step, notices have been delivered to the Bombay Stock Exchange, fixing the record date of February 15, 1999, for exchange of three HLL shares for every 4 PIL shares, the swap ratio approved by the two boards and shareholders.

The interim dividend of 60 per cent announced by PIL payable by reference to the record date of September 29, 1998, would now be paid by HLL, as successor in interest, to PIL shareholders entitled to it.

Likewise, the second interim dividend of 12 per cent, announced by PIL on October 14, 1998, and payable to members by reference to the record date of February 15, 1999, will also be discharged by HLL to the PIL shareholders eligible to receive it.

The second interim dividend has been declared by the board of PIL with the prior concurrence of HLL as stipulated in the scheme. The first and the second interim dividends of PIL aggregate to 72 per cent, corresponding to the interim dividend of 96 per cent declared by HLL, taking into account the stipulated share exchange ratio of 3:4.

This there will be parity between PIL and HLL shareholders in the matter of interim dividend. The board of HLL is scheduled to meet on October 27, 1998, to take on record the provisional unaudited third quarter results of the company, for the period ending September 39, 1998.

The third quarter results of HLL will include the corresponding results of PIL. Hence no separate announcement would be made for the third-quarter results of PIL, a HLL release said.

The two managements had announced the merger intention in February 1998 and had appointed Y H Malegam, senior partner of S B Billimoria and Co, and Arun Gandhi, senior partner of N M Raiji and Co as joint valuers to recommend the share exchange ratio. They submitted their report (swap ratio of 3:4) on March 12, 1998, which was independently reconfirmed by ICICI Securities and Finance Company Limited for PIL and by ANZ Investment Bank for HLL.

The two boards met on March 16, 1998, and approved the amalgamation proposal, the swap ratio and the scheme of amalgamation. The high courts of Madras and Bombay on the application by PIL and HLL respectively, in March 98 convened meeting of shareholders.

The shareholders of PIL and HLL at their respective court convened meetings in May 1998, approved the merger with overwhelming majority. While in the case of HLL, over 99 per cent in terms of value and number approved the scheme, in PIL over 67 per cent in terms of numbers and over 99 per cent in terms of value approved the scheme. PIL and HLL thereafter applied to the high courts of Madras and Bombay, which finally sanctioned the scheme on August 7, 1998, and September 10, 1998, respectively.

UNI