Punj Lloyd to Seek Investors' Nod for Defence Business Sale

New Delhi: Infrastructure major Punj Lloyd will seek approval of its shareholders for slump sale of its defence business to subsidiary Punj Lloyd Industries for up to Rs 180 crore.

Approval would be sought for authorising Punj Lloyd's board to enter into a business transfer agreement (BTA) with the company's arm, Punj Lloyd Industries Ltd (PLIL), for the sale and transfer of all or part of its defence business undertaking (DBU) engaged in the manufacturing of defence, aviation, aerospace, energy and shipping equipment, the company said in a filing to the BSE.

These include missile artillery systems and related equipment for field application, air defence artillery and associated systems used for defence, internal security, border security and by paramilitary forces, it said. 

"Consent of the members be and is hereby accorded to the Board to enter into a BTA with PLIL... on a slump sale basis, for a lump sum consideration not exceeding Rs 180,00,00,000 (Rs 180 crore) payable by the issue of 90,00,000 0.1 per cent cumulative redeemable preference shares of Rs 10 each at a premium of Rs 190 each by PLIL to the company free and clear from all encumbrances," the filing said.

The approval will be sought in the company's annual general meeting scheduled on August 14 under provisions of the Companies Act.

The filing said the deal will comprise "certain assets and liabilities, employees of the Company and technical and other information in respect of the DBU".

Pursuant upon the nod the board will be "authorized to perform all such acts, deeds, things and matters necessary and incidental in this regard including but not limited to negotiating, finalising, settling the terms and conditions of the BTA, adjusting the consideration amount set out above to reflect the extent of the DBU to be transferred to PLIL", it added.

Shares in the company, on Wednesday, ended 2 per cent higher at Rs 28 apiece on the BSE.