LIC-owned Integra Essentia approves amalgamation of GG Engineering

Integra Essentia shares are one of the penny stocks owned by the Indian insurance major Life Insurance Corporation (LIC) of India. The LIC-owned penny stock is expected to remain in focus on Monday as the company board has approved the amalgamation of GG Engineering Ltd. The small-cap company informed about the proposal for amalgamation of GG Engineering Ltd in an exchange filing on Friday. Once the amalgamation is complete, Integra Essential will issue 48 shares of the company to GG Engineering shareholders for every 100 GG Engineering shares.

Integra Essentia-GG Engineering amalgamation

Speaking on the amalgamation, Integra Essentia management said in a detailed written statement, “The proposed amalgamation is expected to create economic value for both the Transferor and Transferee companies. Shareholders of the Transferor company will benefit from reduced finance costs, improved profitability, and additional resources to fund business growth. Shareholders of the Transferee company are expected to benefit from business expansion. Shareholders of both companies are also likely to benefit from increased value created through business synergies, cost savings, reduced administrative/operating costs, and improved financial performance of the merged entity.” The statement further elaborated on the specific strategies and plans to achieve these benefits.

Highlighting the terms and conditions of proposed amalgamation, Integra Essentia said, “Integra Essentia Limited” (Transferee Company) shall issue and allot 48 (Forty-Eight) Equity Shares of Face Value of INR 1/- (Rupees One Each) each to Equity Shareholders of “G G Engineering Limited” (Transferor Company) for every 100 (One Hundred) Equity Share of Face Value of INR 1/- (Rupees One Each) each held by them in the Transferor Company.”

Strategic business objectives underpin the decision to amalgamate the Transferor Company with the Transferee Company. These include preserving the businesses of both companies, building a solid foundation, and achieving market competitiveness by leveraging the collective strength of both companies. The aim is to achieve business and operational synergies, improve financial stability and performance, and preserve and create long-term value for all stakeholders. It’s important to note that while there may be potential risks or challenges associated with this process, the companies are well-prepared to address them.

Thanks to its robust financial stability, the combined entity is poised to attract more organic and inorganic growth opportunities. These could include partnerships, acquisitions, and market expansion, enhancing its financial prospects. Furthermore, this amalgamation will provide a comprehensive solution for Life Essential items and bolster its core objectives.

LIC shareholding in Integra Essentia

According to Integra Essentia Ltd’s shareholding pattern for the January to March 2024 quarter, LIC owns 97,19,832 Integra Essentia shares, which is 1.06 percent of the company’s total paid-up capital. This significant shareholding gives LIC a considerable influence on the company’s decisions and future direction, particularly in mergers and acquisitions, financial policies, and strategic planning. LIC’s influence can significantly shape the outcome of the proposed amalgamation and its impact on the company and its shareholders.

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