In order to create better alliances within existing group companies, create synergy of operations and bring down costs and improve cash flows, Gitanjali Gems has reportedly announced the merger of its arm Gitanjali Exports Corporation Limited (GECL), a wholly owned subsidiary, with itself.
“With a view to rationalise the existing group structure and create synergy of operations, Gitanjali group is presently undertaking consolidation exercise at group level,” the company informed in a BSE filing.
As part of the consolidation exercise, the Board approved the schemes of amalgamation of various group companies. The company is consolidating its various subsidiaries which are into jewellery retail under different brands like Gili and Asmi besides exports.
“This is being done to enable restructuring of Group’s business in a manner that will enable operating of it sourcing, manufacturing, distribution, exporting and retailing arms of the Group in the most beneficial manner by way of reduction in costs and improvement in cash flows,” it said.
“The resultant strategic business model which may help unlocking value in future,” it added.
Reportedly, Asmi Jewellery India Ltd and Spectrum Jewellery Ltd will be merged with Nakshatra Brands Ltd. All the three entities are subsidiaries of the company.
Gitanjali Jewellery Retail Ltd and Gitanjali Lifestyle will be merged with GILI India Ltd.
Gitanjali Jewellery Retail and Gitanjali Lifestyle are the wholly owned subsidiaries of the company, whereas Gili India is a step down subsidiary of the company.
The amalgamation is subject to the approval of High Courts and all other statutory approvals as may be required under the Companies Act, 1956.