Celebrity Fashions Ltd has informed that the Board of Directors of the Company at its meeting held on March 03, 2010, approved the demerger of the domestic business of the Company into Indian Terrain Fashions Ltd. (ITFL). The Board also accorded their approval for hiving off the Company's Bottoms Division to Celebrity Clothing Ltd. (CCL), a subsidiary of Celebrity Fashions Ltd. (CFL) by way of Slump Sale on a going concern basis.
The demerger and hiving off would be in accordance with Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956 (the Scheme). The Scheme is subject to necessary approvals / sanction of the concerned authorities including Stock Exchanges, Hon'ble High Court of Madras, Registrar of Companies, Shareholders and Creditors.
The Scheme further envisages the following:
1. Fair valuation of the assets of CFL as on March 31, 2010 (subject to approval of High Court)
2. Write off of accumulated losses in CFL against the Securities Premium Account to the extent available and / or against the General Reserves / Capital Reserves (if any).
Pursuant to the Scheme, the existing shareholders of CFL will be issued 2 (Two) new equity shares of Rs. 10/- each of ITFL, for every 7 (Seven) shares of Rs. 10/- each in CFL, in addition to their existing shareholding in CFL.
CCL, a subsidiary of CFL, upon hiving-off will issue 1,00,00,000 (1 Crore) equity Shares of Rs. 10/- each to CFL as net consideration for the transfer of assets and liabilities.
The Appointed Date for the transaction is January 1, 2010 subject to the approval of High Court.
Upon the Scheme becoming effective (on approval of the High Court), the shares of ITFL will be listed in BSE and NSE.
CCL will remain unlisted and a subsidiary of CFL.