Chennai, Aug 12 (IANS) Wood products company Uniply Industries Ltd has decided to sell its plywood division and its Gujarat facility to its subsidiary UV Boards Ltd, the company said.
In a regulatory filing in BSE on late Friday, Uniply Industries said it has entered into an agreement to sell its plywood division along with associated working capital to its subsidiary UV Boards for Rs 300 crore.
UV Boards will fund the acquisition by issuing shares worth Rs 111 crore and a cash consideration of Rs 36 crore.
According to the filing, UV Boards will pay Rs 42 crore for Uniply Industries’ Gujarat facility.
The trademarks of Uniply will be licensed to UV Boards for a total fee of Rs 75 crore, to be paid equally over 10 years, in advance at the start of the year.
According to Uniply Industries the transaction will fully deleverage its balance sheet by repaying all long-term debt outstanding of the company and its subsidiary Vector Projects to the tune of Rs 145 crore.
As a result of this transaction, Uniply Industries stake in UV Boards will increase to 37.11 per cent.