Rane Group announces merger of Rane Brake Lining and Rane Engine Valve into Rane (Madras) Ltd.

The Board of Directors of Rane (Madras) Limited (“RML”), Rane Brake Lining Limited (“RBL”) and Rane Engine Valve Limited (“REVL”), at their respective meetings held today, have approved the proposed reorganization through a scheme of arrangement (“Scheme”) which entails merger of RBL and REVL into RML (“Transaction”). The merger significantly simplifies the group structure by consolidating listed operating companies and aligns public shareholders’ interest by converging their stake at a single listed entity.

Upon the scheme becoming effective, RBL shareholders will receive 21 fully paid-up equity shares of RML for every 20 fully paid-up equity shares of RBL held by them as of the record date. Similarly, REVL shareholders will receive 9 fully paid-up equity shares of RML for every 20 fully paid-up equity shares of REVL held by them as of the record date.

The respective Board have approved the entitlement ratio based on the recommendations of independent valuers.

The Scheme is subject to the necessary regulatory and customary approvals including approval of the stock exchanges, SEBI, the respective shareholders, and creditors of each of the companies and NCLT (Chennai bench). Implementation of the scheme is expected to take around 9 to 12 months subject to receipt of the requisite approvals.

The strategic rationale behind the reorganisation is to bring all operating business subsidiaries under a single entity, simplifying the group structure and aligning public shareholders’ interests by converging their stake at a single listed entity. This move aims to capture the full value of the listed operating businesses of the group, unlocking synergies across product lines and enhancing operational and financial efficiencies through scale.

The merger is expected to create a larger entity with a combined turnover of INR 3,373 crore for the trailing twelve months period ended December 31, 2023, on a proforma basis. This consolidation is seen as a strategic move to increase flexibility in raising capital for growth pursuits, both organic and inorganic. 

Commenting on the Transaction, Mr. L Ganesh, Chairman, Rane Group said, “Today marks an important day in our journey to create value for our stakeholders. We welcome the respective Boards’ decision to approve the proposed reorganization which allows all shareholders to participate in the growth of a larger auto component player with diversified product lines with exposure to the attractive automotive industry. The merger will help unlock various synergies among the businesses and will enhance stakeholder value for the long term.”

Mr. Harish Lakshman, Vice Chairman, Rane Group added, “This reorganization scheme demonstrates our commitment to take actions that create value for our shareholders. The transaction simplifies the group structure by bringing together listed operating businesses and creating a platform that is well poised for the next phase of growth.”