The company believes finding a strategic partner for the tyre business would gather steam after the proposed demerger.
BK Birla Group flagship Kesoram Industries on Friday said Manjushree Khaitan, younger daughter of Basant Kumar Birla, is taking over as chairman of the company. Khaitan was executive vice chairperson of the company. BK Birla, who had been the non-executive chairman of the Kolkata-based company, died on July 3. After the demise of the group patriarch, there was some speculation about chairmanship of the group flagship company.
In a stock exchange filing, Kesoram said, “The board of directors of the company at its meeting held today re-designated Manjushree Khaitan, executive vice chairman, as chairman of the board with immediate effect.” It also added that, “Khaitan has, with immediate effect, also relinquished her post as executive vice chairperson and will continue on the board as a non-executive director.”
Recently, Kumar Mangalam Birla, BK Birla’s grandson and chairman of Aditya Birla Group, had written to capital market regulator Sebi for re-classification of his name as ‘public shareholder’ from ‘promoter shareholder’ in Kesoram Industries.
The company, which makes cement, tyre and rayon, had reported Rs 20.75 crore net profit for the March quarter last fiscal, against a net loss of Rs 158.17 crore for the same period previous fiscal, backed by a rise in revenue from operations and a fall in total expenses. The company had posted its first quarterly profit after about 10 quarters. Its revenue from operations in the March quarter of FY19 had grown 5.2% year-on-year at Rs 1,036.58 crore.
Notably, Kesoram’s board in December last year had approved the demerger of the company’s tyre business into a separate firm, Birla Tyres Limited, for opening new “growth vistas” for the new entity by attracting fresh investment and technology. The company believes finding a strategic partner for the tyre business would gather steam after the proposed demerger.
The stock exchanges have accorded in principle approval to the scheme. Accordingly, the company has filed the scheme with the Kolkata bench of the National Company Law Tpribunal (NCLT). “The scheme will be effective upon receipt of approvals as may be statutorily required including that of the Kolkata bench of the National Company Law Tribunal,” according to the company’s latest annual report.
The proposed demerger is part of an ongoing exercise undertaken by the company over the past few months in further realigning and recalibrating operations, aiming to transform each business into entities that are market driven in their approach.