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Boards approve Graphite, Carbon Everflow merger

Our Bureau

KOLKATA, Nov. 29

THE stage has been set for the merger of Graphite India Ltd with Carbon Everflow Ltd. The board of directors of both the companies approved the proposed merger at separate meetings held here today. The name of the amalgamated company will later be change d to Graphite India Ltd and it will be registered in West Bengal, according to Mr K.K. Bangur, Chairman of the K.K. Bangur group of companies.

Carbon Investments Ltd, a wholly-owned subsidiary of Carbon Everflow Ltd, will also merge with Carbon Everflow Ltd. Graphite Holdings Ltd and Graphite Investments Ltd, the two wholly-owned subsidiaries of Graphite India Ltd, will also be merged with each other.

Informed sources said the merger will be effective from April 1, 2001 subject, however, to necessary approvals of shareholders and the High Courts of Kolkata and Mumbai. The exchange ratio has been fixed at 14 shares of Carbon Everflow Ltd for every 10 s hares of Graphite India Ltd.

Mr Bangur told Business Line over the telephone that the merger will facilitate synergy of operations of the two companies.

The merged company will pool all resources together, attain cost-competitiveness, and thereby emerge as a stronger company in financials. A healthy balance sheet is also expected to help in raising resources that would be required in the long-term for fu elling growth plans.

The merged entity will have a combined capacity of 31,000 tonnes per annum (tpa) which will go up to 38,000 tpa on completion of Graphite Indias expansion plans.

The merged entity will be the largest producer of graphite in Asia and have a power generating capacity of 33 MW. The merger was expected to facilitate the consolidation of the groups position as a market leader with a 60 per cent share of the domestic m arket for graphite.

Carbon Everflow Ltd has three units in and around Nashik in Maharashtra manufacturing graphite electrodes, anodes and carbon paste, impervious graphite equipment and glass fibre reinforced plastic pipes and tanks. The companys graphite electrodes produci ng capacity stands at 10,000 tpa. Exports account for 77 per cent of the total production of the company.

Graphite India Ltd has its manufacturing units in West Bengal and Bangalore and produces graphite electrodes, anodes, carbon paste and other miscellaneous carbon and graphite products. The combined capacity of its two plants currently stands at 21,000 tp a, and is slated to go up to 28,000 tpa in the future.

According to Mr Bangur, the combined turnover of both the companies stood at Rs 410.30 crore as on March 31, 2001. Of this, exports contributed Rs 230 crore.