March 15, 2021 (MLN): At the Extra Ordinary General Meeting (EOGM) of the Babri Cotton Mills Ltd, held on 13th March 2021, the members of the Company, through special resolutions, have approved the Proposed Scheme of Arrangement of Merger /Amalgamation of the Company with Janana De Malucho Textile Mills Ltd (JDMT), under Companies Act, 2017.
According to the notice issued to Exchange, the members were duly apprised of the material facts regarding the Scheme as below:
The merger of the Company with JDMT is necessary because otherwise, it would be impossible for the Company to survive any further because of massive outstanding liabilities and huge gross, operating and net losses. The outstanding current liabilities of the Company amounts to Rs.1,203.320 million as of 30 June, 2020. The Company has incurred a gross loss of Rs.118.061 million for the year ending on 30 June, 2020 and loss after tax was Rs.387.598 million. Therefore, the only viable solution is the merger of the Company with JDMT as it would not be possible for the Company to continue its operations alone.
The proposed scheme of merger/amalgamation between the Company and JDMT will result in the Company being merged into JDMT, with all the assets and liabilities of the Company being transferred into JDMT, and the members of the Company being issued shares of JDMT at the ratio of 1 share of JDMT for every 1.438266 share of the Company.
