JK Paper Board Approves Restructuring; Three Subsidiaries To Be Merged Into Listed Entity

The board of JK Paper Ltd. on Friday gave several approvals, which are part of the plan to restructure its businesses. These include a composite scheme of arrangement involving JK Paper Ltd. and its three wholly owned subsidiaries, according to an exchange filing.

As part of the scheme, JK Paper’s subsidiaries—Horizon Packs Pvt., Securipax Packaging Pvt., and JKPL Utility Packaging Solutions Pvt.—will be merged with itself to create a consolidated paper and packaging company. These subsidiaries are engaged in manufacturing of packaging products and solutions.

The filing added that pursuant to the scheme, another JK Paper subsidiary—Sirpur Paper Mills Ltd.—will become a direct subsidiary of the company.

JK Paper Chairman and Managing Director Harsh Pati Singhania said that the move “would result in the consolidation of paper and packaging businesses and streamline the corporate structure bringing in efficiencies in operations, processes, and ease of compliances”.

On getting the necessary approvals, the transaction is expected to be completed in 12 months.

The scheme needs to be approved by the stock exchanges, the Securities and Exchange Board of India, the National Company Law Tribunal, and other statutory and regulatory authorities under applicable laws. It also requires approvals from shareholders and creditors of the respective companies.

Meanwhile, the board of JK Paper also approved the acquisition of a majority stake in Radhesham Wellpack Pvt.

JK Paper has entered into a share purchase and shareholders’ agreement to acquire a 60% stake in Radhesham Wellpack for a little over Rs 63.47 crore. It will purchase 75,000 shares for Rs 8,463 apiece. The balance 40% stake will be acquired within two years, the company said.

Chairman Singhania said, “The acquisition of RWPL is in line with the long-term strategic objective of the company in the packaging business and gives us an opportunity to have a greater footprint in the western region.”

Shares of JK Paper closed 2.74% lower at Rs 454.9 apiece on the National Stock Exchange, compared to a 0.89% advance in the benchmark Nifty 50.