July 7, 2015: Philips India passed a resolution in a court and convened shareholders’ meeting to demerge its lighting division. The move was opposed by a section of minority shareholders.
In the meeting some minority shareholders opposed the demerger and feared that the same was a precursor to hive-off the healthy business from the company in line with the parent company’s move.
In March, reports said the parent Royal Philips had agreed to sell 80.1% stake in its lighting components division for US$ 2.8 billion to Go Scale Capital, a technology fund that will seek to expand the company’s automotive and LED businesses.
“I want to ask in the last 25 years how many times the company has rewarded its shareholders? After delisting, now with demerger it seems you want to sell the lighting divison…,” minority shareholder M K Bubna said during the meeting.
Another shareholder, A K Banerjee questioning the intention of demerger said, “Was it actually necessary given the explanation provided.” Bubna said, “Our opposition will not help as 97 per cent of stake is held by promoters.”
The management also shied away from the question of Bubna and other shareholders for an assurance that the demerged entity Philips Lighting India will not be hived-off in near future. Public shareholding in the Philips is only 3% and shareholders will get shares in the new demerged lighting business on 1:1 basis.
The company in the notice to shareholders for demerger said the transfer and vesting of the lighting business in a separate company effective from February 1, 2016 in line with the global separation plan of the Philips.
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