The new unlisted firm— Wipro Enterprises—will include Wipro Consumer Care & Lighting, Wipro Infrastructure Engineering and Medical Diagnostic Product & Services business
Mumbai: Information Technology (IT) giant Wipro today said it will demerge three non-IT business divisions, including consumer products segment, into a privately-held company to be named Wipro Enterprises Limited, reports PTI.
The new unlisted firm will include Wipro Consumer Care & Lighting (including furniture business), Wipro Infrastructure Engineering (hydraulics and water businesses) and Medical Diagnostic Product & Services business, Wipro said in a filing to the Bombay Stock Exchange (BSE).
Following the move, shares of the IT major surged nearly 7% to Rs375 on the BSE, in the morning trade.
Wipro will remain a publicly listed company that will focus exclusively on information technology, while Wipro Enterprises will be an unlisted company, the filing said.
The board of Wipro will remain unchanged and the demerger will have no impact on the management structure of the IT major, it added.
There will be no change in the leadership of any of Wipro Enterprises’ constituent businesses as well and the Wipro brand will be jointly owned by both the companies, it said.
Azim Premji will remain the executive chairman of the board of Wipro and will assume the position of non-executive chairman of Wipro Enterprises.
“I am confident that the demerger will enhance value for our shareholders and provide fresh momentum for growth. Each of our distinct businesses is best of breed in its respective industry and we are committed to both the businesses,” Mr Premji said.
The date of demerger has been fixed as 1 April 2012, and is expected to be completed by the next financial year, subject to regulatory approvals.
Under the proposed restructuring scheme, resident Indian shareholders of Wipro have three options—receive one equity share with face value of Rs10 in Wipro Enterprises for every five equity shares with face value of Rs2 each in Wipro that they hold.
Receive one 7% redeemable preference share in Wipro Enterprises with face value of Rs50, for every five equity shares of Wipro that they hold.
The third options is exchange the equity shares of Wipro Enterprises and receive as consideration equity shares of Wipro held by the promoter, the filing noted.
The exchange ratio will be one equity share in Wipro for every 1.65 equity shares in Wipro Enterprises.
Each redeemable preference share will have a maturity of 12 months and shall be redeemed at a value of Rs235.20.
TK Kurien, Chief Executive Officer (CEO), IT Business and Executive Director (ED), Wipro said, “Creating a technology-focused company will allow us to better serve the needs of our customers and accelerate investments necessary to capitalise on market growth opportunities.”
Non-resident shareholders (excluding ADR holders) and ADR holders on the record date would be entitled to receive equity shares of Wipro Enterprises in the aforesaid ratio, the filing said.
The non-resident shareholders (excluding ADR holders) shall further have the option to exchange the Wipro Enterprises’ equity shares that they are entitled to and receive equity shares of Wipro Limited held by the promoter in the aforesaid ratio.
According to the restructuring scheme as currently proposed, Wipro Enterprises equity shares that the ADR holders would otherwise be entitled to receive, shall be compulsorily exchanged for equity shares of Wipro held by the promoter in the aforesaid ratios.
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