Pursuant to the scheme of arrangement approved by the Allahabad High Court in October 1998, Radico Khaitan (RKL) has been divided into three separate companies. While the distilleries division of the company will function as Radico Khaitan Ltd, the other two divisions, soya and fertilisers, have been hived off as Khaitan Soya Ltd (KSL) and Rampur Fertilisers Ltd (RFL), respectively.

The shareholders of RKL will receive 16 shares of KSL, 22 shares of RFL and will retain the residual 62 shares of RKL for every 100 shares held in the undivided company. Currently, RadicoKhaitan has a Rs 22.6 crore equity capital.

The present scheme of arrangement has been the result of G N Khaitan's wishes to divide all the companies managed by him among his three sons.

While Radico Khaitan, from now on, will be managed by Lalit Khaitan, Khaitan Soya will be managed by Shailesh Khaitan, who also manages Khaitan Chemicals and Fertilisers (KCFL). Rampur Fertilisers, on the other hand, will be managed by Gangesh Khaitan.

According to vice-president, finance, KCFL, Harsh Agnihotri, the scheme of arrangement has also been approved by the financial institutions (FIs). As of September 1998, the FIs jointly had a 6.6 per cent stake in the company, with the promoters holding 58.36 per cent and the balance of around 35 per cent by the retail investors.

Khaitan Chemicals driven by results

The more than 60 per cent appreciation in the Khaitan Chemicals and Fertiliser (KCFL) scrip in just six trading sessions on BSE is vindicated by the good results that the investors were expectingfrom the company. The company has declared a 77 per cent rise in net profit (annualised) to Rs 5.33 crore from a net sales of Rs 72.49 crore during the nine-month period ended December 1998. During the whole of fiscal 1998, the company had earned a net profit of Rs 4.02 crore from a Rs 61.01 crore net sales.

Between January 7 and January 15 the KCFL scrip on BSE had risen to Rs 21.25 from Rs 14. However, given the low amount of floating stocks available, there wasn't any substantial rise in its daily volumes on the bourse which remained in the range of 200-400 shares. After the results were announced, a correction in the scrip has taken it to Rs 22.

On an enhanced equity of Rs 4.52 crore, the company's annualised earnings per share is Rs 15.72 against the fiscal 1998 EPS of Rs 13.32. To fund the company's expansion plan, in March 1998, Khaitan Chemical had floated a Rs 4.52 crore rights issue at a premium of Rs 10.

During the year to March 1998 the company had doubled its single super phosphatemanufacturing capacity to 264,000 tonne per annum. It had also commissioned its gas-based 2.8mw captive power plant during October 1998 which utilises the waste heat of the sulphuric acid plant and make the company's fertiliser unit self sufficient in power. According to managing director, KCFL, Shailesh Khaitan, this will result in substantial savings for the company in the form of lower cost of power. However, the savings originating from the use of this captive power plant will only be reflected in the balance sheet from the current quarter, says Khaitan.