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Prabhat Dairy to consider delisting, shares rally 20%

The board of directors is meeting on September 10 to consider delisting proposal.

ETMarkets.com|
Sep 06, 2019, 02.35 PM IST
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Shares of Prabhat Dairy hit upper circuit limit of 20 per cent on Friday after the company informed bourses that it is mulling to voluntarily delist the equity shares of the company from stock exchanges.

In a BSE filing on Thursday, the company said the board of directors is meeting on September 10 to consider delisting proposal. It will also consider the appointment of a merchant banker registered with the Securities and Exchange Board of India for carrying out due diligence.

While giving the rationale behind the delisting plans, the company said that it has recently completed the sale of its dairy business undertaking by way of slump sale along with the sale of its 100 per cent shareholding in Sunfresh Agro Industries (stepdown subsidiary of company) pursuant to a share purchase agreement to the Tirumala Milk Products, a wholly owned subsidiary of French dairy multinational Groupe Lactaiis.

After the business sales, the company is no longer operating in its core business, which contributed the majority of the revenues and profits of the company.

“We understand and recognise that a majority of the public shareholders would have invested in the company, with the intention of investing in a company engaged in the dairy business,” Prabhat Dairy said in a filing.

It also added that the delisting of equity shares of the company will result in reduction of the ongoing substantial compliance costs which includes the costs associated with listing of equity shares such as annual listing fee and fees payable to share transfer agents or such other expenses required to be incurred as per the applicable securities law.

“The delisting of equity shares is in the interest of the public shareholders as it will provide them with an exit opportunity at a price determined in accordance with the Delisting Regulations,” Prabhat Dairy said.

The scrip advanced 19.95 per cent to Rs 78.15.

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