AVANI PETROCHEM P. LTD. Vs. STATE

JUDGEMENT

(1.) THESE petitions filed by two petitioners for sanction of a scheme of arrangement in the nature of amalgamation of Amishi Petrochem P. Ltd., transferor company with Avani Petrochem Pvt. Ltd., transferee company under Section 391 to Section 394 of the Companies Act, 1956.

(2.) IT has been submitted that both the transferor and transferee companies belong to the same group of management and hence the board of directors of these companies thought it fit to restructure them through amalgamation for achieving synergic advantages. The amalgamated company would be in a position to maximise its profit through optimum utilisation of its resources and minimising the administrative and operative costs. The amalgamated company will have a much larger capital base, which will give it competitive edge and also provide financial requirements. Thus, the proposed amalgamation would create synergy of operations, optimise cost, eliminate unnecessary administrative overheads, results into pooling of financial resources, etc., and all would be to the mutual advantage of all the transferor and transferee companies. It has been further submitted that the scheme is proposed to strengthen the financial position of the transferee company and to minimise the administrative and other expenses. The amalgamation would enable the resultant company to attract superior managerial talents to manage its affairs thereby offer better satisfaction to its consumers and users which would enhance the value of its shareholders and strengthen its market position in the field of business.

(3.) THIS court vide its order dated February 27, 2007, passed in Company Application No. 99 of 2007 dispensed with the meeting of equity shareholders of the transferor company as required to be convened under Section 391(2) of the Companies Act, 1956.