Accordingly, one share of Arvind Products will be issued for one share held in Arvind Polycot, five shares of Arvind Products for every seven held in Arvind Cotspin and four shares of Arvind Products for every seven held in Arvind Intex, stated a company press release issued here on Monday.

The merger will be subject to approvals from shareholders and institutions and in confirmation of the merger scheme announced by the Gujarat high court. The shares of Arvind Products -- a wholly-owned subsidiary of Arvind Mills, the flagship company of Lalbhai Group - are proposed to be listed on major stock exchanges.

However, the release said, the existing preference shares of the threecompanies will continue as such in APL.

Post merger, the share capital of Arvind Products will be Rs 80.83 crores, with Arvind Mills holding 54 per cent of the enhanced equity capital in the merged company. The balance equity will be held by institutions and public.

The share-exchange ratio as approved by the boards was based on the recommendations of two independent valuers, Bansi S Mehta & Co and CC Chokshi & Co. The valuation was based on commonly-applied methods and rules guidance upheld in the country, taking into account net asset value, profit-earning capacity, value based on past results, projected working results and market price.

The group has initiated this restructuring with a view to make it a world class player in cotton-textiles industry, integrating business operations, reducing inter-company transactions, with a leaner and more focussed structure, resulting in transperancy and elimination of cross holdings between group companies. Arvind Products will have three businesses -- gaberdine, being commissioned shortly, voiles and cotton yarn -- expecting a combined sales of Rs 500 crore in 1999-2000.

The merger will strengthen the balance sheets of both Arvind Mills and Arvind Products by capturing the intrinsic synergy between cotton yarn, gaberdine and denim The release also states that existing employess of the three companies will be abosorbed into Arvind Products.