In order to streamline operations, the board of Welspun Living Ltd. has given authorisation for the proposed plans to merge Welspun Home Solutions Ltd. with Welspun Advanced Materials (India) Ltd. Both are the parent company’s fully-owned subsidiaries.
According to an exchange filing, Welspun Home Solutions has not yet started its business operations despite being incorporated to manufacture house textiles. The company named Welspun Advanced Solutions is into manufacturing of various products, some of which include nonwovens, technical textiles, textiles for home and advanced materials.
All of Welspun Advanced Materials’ shares in Welspun Home Solutions’ share capital will be cancelled upon the proposed plan’s implementation, with no further action or deed required. No new shares will be issued nor any payments will be made to the shareholders of Welspun Home from the company named Welspun Advanced Materials.
As per Welspun Living, the amalgamation plan will facilitate the simplification and streamlining of the business structure by consolidating all the new manufacturing sites under a single entity.
According to the corporation, cutting out redundant expenses will result in lower operational, administrative, and overhead costs as well as increased cost and operational efficiencies. Additionally, by utilising the merged company’s financial power, simplifying legal and regulatory compliances would increase total shareholder value.
The merger of these two entities of Welspun presents a potential opportunity for growth since they will be combining and utilising the capabilities, expertise, infrastructure, assets and experience that these two entities have possessed and used.
Additionally, it helps the transferee company manage its cash flow more effectively by giving it unrestricted access to funds that may be strategically used for future expansion and growth, according to Welspun Living.
