Max India: Amalgamation scheme order sanctioned by NCLT
On Friday, Max India Limited's announcement stating that they have obtained a copy of the order sanctioned by NCLT for the scheme of arrangement and amalgamation caused a rise in its share price of up to 15 per cent, intraday.
The scheme was approved in 2018 by the board of directors, aiming at amalgamation by divestment of equity shares.
Max India had declared this scheme in its FY19 annual report and specified details of how it would come into effect. It is the parent company for Max Bupa Health Insurance Company Limited, Antara Senior Living Limited, Radiant Life Care Private Limited, Max Healthcare Institute Limited and Advaita Allied Health Services Limited. The scheme involves Max Bupa and Antara Living demerging from Max India and becoming a part of Advaita. Simultaneously, the healthcare business which is under Radiant Life will become part of Max Healthcare. Third stage will include residual Max India (the remaining value after first demerger) amalgamating with Max Healthcare.
Therefore, the demerger of Max India will result in two listed companies, one created by the merger of Max Healthcare & Radiant Life Care, and the other by the merging of Max Bupa, Antara Living and Advaita.
Max Healthcare shall be listed on stock exchanges once the scheme has been successfully implemented. The members of the board plan to have a meeting on June 01, 2020 and decide the record date, which will determine who will be entitled to allot shares of Advaita Allied Health Services Limited and Max Healthcare Limited. Such a move is expected to create strong value unlocking.
The company's share closed 8.5 per cent higher, at Rs 61 on BSE.