Welspun Living Gets Board Nod For Merger Of Two Subsidiaries To Streamline Business

Welspun Living Ltd. board on Thursday approved plans to merge unit Welspun Home Solutions Ltd. with Welspun Advanced Materials (India) Ltd to streamline business. Both are wholly-owned subsidiaries of the parent.

Welspun Home Solutions has been incorporated to engage in the business of manufacturing of home textiles and is yet to commence its business operations, according to an exchange filing.

Welspun Advanced Materials manufactures home textiles, technical textiles, advanced materials, and nonwovens, etc.

Upon the proposed scheme becoming effective, all shares held by Welspun Advanced Materials in the share capital of Welspun Home Solutions will stand cancelled, without any further act or deed. Hence, no allotment of any new shares or any payment will be made by Welspun Advanced Materials to the shareholders of Welspun Home Solutions, the filing said.

Welspun Living said the scheme of amalgamation will allow streamlining and simplification of the business structure by setting up all the new manufacturing facilities under a single entity.

The elimination of duplicated costs will lead to a reduction in operational, administrative expenses, and overheads, resulting in improved cost and operational efficiencies, the company said.

Additionally, streamlining legal and regulatory compliances will enhance overall shareholder value, leveraging the financial strength of the combined entity.

The merger also offers growth opportunities by leveraging combined assets, capabilities, experience, expertise, and infrastructure. Moreover, it facilitates more efficient cash management for the transferee company, providing unhindered access to cash flow that can be strategically deployed for future growth and expansion, Welspun Living said.

Welspun Living share price closed 1.13% higher at Rs 165.2 apiece, ahead of the announcement, compared to 1% advance in the benchmark BSE Sensex. The stock has risen 15% on a year-to-date basis.