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Orient Paper & Industries Ltd. – Investor Presentation. 15 th September, 2016. Orient Paper & Industries Ltd. (OPIL): Company Profile. OPIL operates in two businesses 1) Paper and 2) Consumer Electric Products
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Orient Paper & Industries Ltd. – Investor Presentation 15th September, 2016
Orient Paper & Industries Ltd. (OPIL): Company Profile • OPIL operates in two businesses 1) Paper and 2) Consumer Electric Products • The Paper division manufactures Writing & Printing Paper (60,000 tonnes per annum) and Tissue Paper (25,000 tonnes per annum, being expanded to 50,000 tonnes per annum) at its facility at Amlai (Madhya Pradesh) • The Consumer Electric Products division manufactures fans, lighting products, consumer appliances and switch gears at its facilities at Faridabad, Kolkata and Noida • For the year ended March 31, 2016, OPIL reported total income of Rs. 1,838 crores and PBDIT of Rs. 117 crores
Outcome of the Board Meeting dated Sept 15, 2016 • The Board of OPIL at its meeting held on September 15, 2016 approved the issuance of fresh equity shares via a Rights Issue aggregating Rs. 50 crores • The Board of Directors of the Company also gave in-principle approval for the vertical demerger of its Consumer Electric Products division • The Board has appointed a committee of Directors (“Rights Issue Committee”) to decide the terms of the issue. The Board has also appointed a committee of executives (“Demerger Committee”) to formulate and recommend the demerger scheme to the Board
Rationale for the Transaction • Rights Issue to improve the capital structure of the Company • Demerger of the paper and consumer electric business is aimed at enhancing shareholder value and provides an opportunity to the two businesses to pursue their independent growth strategies • Transaction is structure to ensure fairness and transparency for all stakeholders
Transaction: Rights Issue Proceeds to be used for Debt Repayment and General Corporate Purpose Rs. 50 cr Rights Issue OPIL Rights Issue
Transaction: Demerger Public Promoter Group Public Demerger (100 – X) % (100 – X) % X % X % OPIL New Electrical Co Electrical Co to be listed