Earlier, the board, in a meeting dated 22 November 2023, had approved the trifurcation of the business of LIL
The Board of Directors of Lux Industries (LIL) has given its in-principle approval for the proposed demerger of the business. This will result in the trifurcation of the business of LIL into three separate verticals. Shares of the company dropped to the day’s low of Rs 1,616 on the National Stock Exchange (NSE) on Friday after opening at Rs 1,795.
The company’s board held its meeting on Thursday and it was informed that the members of the promoter and promoter group from the Todi family of the company have entered into a Family Settlement Agreement (FSA). However, the company clarified that Lux Industries itself is not a party to the agreement.
Earlier, the board, in a meeting dated 22 November 2023, had approved the trifurcation of the business of LIL. Pursuant to the FSA, the board has accorded its in-principle approval for the scheme of demerger.
Subject to approval from regulatory authorities and other stakeholders, the proposed scheme of demerger contemplates that on the effective date of demerger, the existing businesses of vertical A and vertical C would be demerged into two resulting companies, which will be subsequently listed.
The Three-way Split
The business of Vertical B shall continue to remain in the Company and is proposed to be led by Pradip Kumar Todi or any other member of his family. One of the resulting companies to be listed for vertical A is proposed to be led by Ashok Kumar Todi or any other member of his family. The other resulting company to be listed for vertical C is proposed to be led by Navin Kumar Todi or any other member from the KKT family.
The AKT Family and KKT Family will cease to hold any right in the management and/or control in LIL and the PKT Family will continue to manage and control the company. Vertical A will include Lux Cozi, Lux Parker, ONN and Lux Cottswool. Vertical B will include Lux Venus, Lux Nitro, Lux Inferno and Lyra. On the other hand, vertical C will have Lux Classic, GenX, Lux Karishma, Lux Amore and Lux Champion, the company said in an exchange filing.
For the purposes of facilitation of the demerger, the board has also approved the immediate incorporation of two wholly owned subsidiaries in West Bengal with the name of ‘Lux’. The board also said that the revised brand licensing agreement is approved and executed between the company and Biswanath Hosiery Mills or BHML to safeguard the company’s rights and obligations over the licensed brands, which are integral to its identity and operations and will therefore ensure continuity of brands related usage.
Upon execution of such brand licensing agreement with BHML, the existing brand licensing agreement with BHML is terminated with immediate effect.
The company clarified that the principal ‘Lux’ trademark with design and font shall remain the exclusive property of BHML at all times and be perpetually licensed in favour of LIL and two resultant entities for corporate uses only.
