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Wartsila arm to merge with parent

Our Bureau

KOLKATA, Aug. 15

WARTSILA India Ltd will place before shareholders a scheme of amalgamation pertaining to Wartsila Operations & Maintenance India Ltd, a wholly-owned subsidiary. The scheme has been vetted by the Bombay High Court.

On July 25, the court passed an order directing a meeting of Wartsila shareholders. The ``appointed date'' for the scheme will be April 1, 2001. The AGM will be held next month.

According to a statement sent to shareholders, Wartsila Operations & Maintenance was incorporated in 1995 as NSD India Ltd, which was later changed to Wartsila NSD Operations India Ltd. The company got its present name in January 2001.

The merger of the subsidiary, engaged in round-the-clock operations and maintenance of power plants, is expected to bring in operational synergies, shareholders have been told. More particularly, the merger is important on three counts.

First, it will make available to the two parties the benefits of financial resources and the managerial, technical, distribution and marketing expertise of each other.

Second, they will have the benefit of combined reserves, manufacturing and other assets, manpower and cash flows of the companies. The combined resources will help enhance their capability to face competition.

Third, the consolidated post-merger balance sheet of the lead company will reflect increased shareholder value, it is expected.

Wartsila India is a power supplier undertaking turnkey assignments for power plants, including design, engineering, procurement and construction aspects. It provides total energy solutions for captive users, utilities and independent power producers.

The authorised share capital of the subsidiary is Rs one crore. The entire capital is held by Wartsila India, and there will be no issue of shares in the process of amalgamation. Shareholders have been told that pursuant to the vesting of the undertaking in Wartsila India, the investment in the subsidiary's shares (appearing in the books of the parent entity) will stand cancelled.