National Company Law Tribunal (NCLT) has approved the scheme of merger by absorption of Mahindra Engineering and Chemical Products Limited (MECPL), Retail Initiative Holdings Limited (RIHL) and Mahindra Retail Limited (MRL) with the Mahindra and Mahindra (M&M) Group and their shareholders.
This scheme has become effective from April 29, according to a latest exchange filing by Mahindra & Mahindra. There will be no changes in the shareholding pattern of the Company in keeping with the scheme.
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“Upon the scheme becoming effective, no shares of the Company shall be allotted in lieu or exchange of the holding of the Transferee Company (M&M) in the First Transferor Company (MECPL) or one Transferor in another Transferor Company (held directly and jointly with its nominee shareholders) and accordingly, equity shares held in the Transferor Companies (MCEPL, RIHL, MRL) stand cancelled on the effective date without any further act, instrument, or deed,” the filing mentioned.
MECPL was an unregistered core investment company and a wholly owned subsidiary of the Mahindra Group and was engaged in trading of apparels, stationery items, gift cards, IT products, COVID safety products, etc.
RIHL is a wholly owned subsidiary of MECPL and acts as a holding company for is investments in MRL. It was not engaged in any business activities at the time of the merger.
MRL, on the other hand, was an unregistered CIC and owned RIHL (~53 per cent) and MECPL (~47 per cent) and was not carrying out any business operations at the time of the merger.
The Mahindra Group has a six-point rationale behind this amalgamation by absorption—operational synergies, rationalisation of costs, streamlining the company structure, simplifying financial reporting to stakeholders, reduction in multiplicity of legal and regulatory compliances and benefitting the shareholders, creditors and stakeholders of the three companies, as per the filing.
It further states, “The proposed corporate restructuring mechanism by way of a scheme of merger by absorption under the provisions of the Act will be beneficial, advantageous and not prejudicial to the interests of the shareholders, creditors and stakeholders of MECPL, RIHL, MRL and the company.”
