Max India on Thursday said it has got High Court approval for restructuring and the company’s demerger into 3 separate listed entities will be effective from January.
Max Financial Services is expected to trade ex-demerger from next month, and the other resulting companies from February 2016, the company said in a statement.
“The High Court of Punjab and Haryana vide its order dated December 14, 2015 approved Max India’s Composite Scheme of Arrangement for the demerger of the company,” it said.
Upon receipt of the detailed certified order, the Company will file the same with the Registrar of Companies (RoC) for achieving ‘Effective Date’ of the demerger – the day the 3 legal entities will stand demerged.
On the effective date, the existing company, Max India will be renamed as Max Financial Services Ltd.
Max India board in January approved a corporate restructuring plan to vertically split the company through a demerger into three separate listed companies to provide sharper focus on each business.
Through a demerger, the group will have three separate business verticals - Max Financial Services for life insurance; Max India Ltd for health care, health insurance & allied businesses; and Max Ventures and Industries Ltd for manufacturing activities.
Max India has already received approvals for its proposed corporate restructuring from the Securities and Exchange Board of India (Sebi), the two stock exchanges where it is listed the Bombay Stock Exchange & the National Stock Exchange as well as from the Competition Commission of India (CCI).
The proposed restructuring is a significant strategic event and is being undertaken to provide investors specific and undiluted access to Max India’s diverse lines of businesses, provide sharper focus to each underlying business and to unlock shareholder value.
Post restructuring, Max India’s existing shareholders will retain one equity share of Rs 2 in Max Financial Services Limited.
They will additionally get one equity share of Rs 2 each of the new company Max India Ltd for every one equity share held in Max Financial Services and one equity share of Rs 10 each of Max Ventures and Industries Limited for every 5 equity shares of Rs 2 each held in Max Financial Services.
The company has applied for approval from the Foreign Investment Promotion Board (FIPB) to enable issuance of the aforesaid new shares.