Forbes & Co to demerge precision tools business

Shapoorji Pallonji Group firm, Forbes & Company Ltd on Monday announced plans to demerge its precision tools business.

The company, which has presence in a wide range of businesses like industrial automation, coding, medical devices, parts and applications, ventilators and real estate, said the precision tools business will be carved out into a new entity -- Forbes Precision Tools and Machine Parts Ltd (FPTL).

The board of directors of the company in its meeting held on September 26, 2022 approved the scheme of arrangement, Forbes & Company Ltd (FCL) said in a regulatory filing.

Under the plan, four fully paid up equity shares of Rs 10 each of FPTL will be issued and allotted for every one fully paid up equity share of FCL of Rs 10 each, it added.

The new shares of FPTL to be issued and allotted to the shareholders of FCL would be applied for listing on BSE Ltd, the filing said.

The turnover of the demerged precision tools business was Rs 179.22 crore in the financial year ended March 31, 2022, accounting for 76.25 per cent of the total turnover of the company.

On the rationale behind the proposed demerger, FCL said it will result in the creation of a sector-focused company and also unlock the value for the shareholders by listing of the shares of the new entity.

Each of the varied businesses carried out by FCL have significant potential for growth and profitability and can attract different sets of investors, strategic partners and lenders, the filing added.

''Therefore, as these businesses approach their next phase of growth, it would be strategically apt to segregate the precision tools business from the remaining business,'' FCL said.

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