Torrent Group initiates merger of all its power companies into single entity

The Torrent Group has been considering the consolidation / restructuring of its existing operations in the power sector through evaluation of appropriate restructuring options, including merger / amalgamation or any other manner.

The Boards of Directors of Torrent Power AEC Limited (TPAL), Torrent Power SEC Limited (TPSL) and Torrent Power Generation Limited (TPGL) at their respective meetings held on 24th January, 2006 had appointed Committees of Directors to study and suggest a suitable business model for reorganization / restructuring of the power businesses of the Group.

The three Committees in their joint meetings, working along with various consultants and advisors, have evaluated the issue and have recommended the re-structuring of the operations of all the three companies by way of merger / amalgamation into a new entity. The recommendations of the Committee have been considered and approved by the Boards of Directors of TPAL, TPSL and TPGL at their meeting held on 22nd March, 2006. Accordingly, it is proposed to amalgamate the entire business and undertaking of TPAL, TPSL and TPGL on a going concern basis into a new entity. The new entity identified for the purpose is Torrent Power Limited.

The Boards of Directors have approved the following exchange ratios for the purpose of the Scheme of Amalgamation

	22 (Twenty Two) fully paid up equity shares of Rs. 10/- each in Torrent Power Limited for every 1 (One) fully paid up equity share of Rs.10/- each, held by each member of TPAL;
	47 (Forty Seven) fully paid up equity shares of Rs. 10/- each in Torrent Power Limited for every 1( One) fully paid up equity share of Rs.10/- each, held by each member of TPSL;
	1 (One) fully paid up equity shares of Rs. 10/- each in Torrent Power Limited for every 1 (One) fully paid up equity share of Rs.10/- each, held by each member of TPGL;

The above exchange ratios are based on the valuation report by M/s N M Raiji & Co. Chartered Accountants. M/s. Ernst & Young Pvt. Ltd. has given their fairness opinion on the above exchange ratio.

The Boards of Directors also recommended the reorganization of the share capital of Torrent Power Limited, the transferee company, by way of reducing the face value of each fully paid up equity share of Rs.10 each to 1 (one) fully paid up equity share of Rs. 2.50 each and simultaneously consolidating 4 (four) equity shares of Rs.2.50/- each into 1 (one) equity share of Rs.10/- each. Pursuant to this reorganization, the shareholding of the shareholders in Torrent Power Limited shall reduce proportionately. As a result, the shareholders of TPAL, TPSL and TPGL would actually receive 5.5 shares, 11.75 shares and 0.25 shares of Torrent Power Limited respectively, for each share held by them in their respective companies.

All the above are subject to requisite approvals including those of Stock Exchanges under the Listing Agreement, shareholders, creditors, any regulatory authorities and sanction of the scheme of amalgamation in terms thereof by the High Court of Gujarat at Ahmedabad.

The Board of Directors of TPAL and TPSL at their meeting held on 22nd March, 2006, subject to approval of the Registrar of Companies and such other approvals as may be required, also decided to extend the current financial year which ends on March 31, 2006 to close on September 30, 2006.

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