TVS Holdings Ltd will issue and allot forty six 6% cumulative non-convertible redeemable preference shares (NCRPS) to its shareholders as bonus shares for every one fully paid-up equity share held.
The National Company Law Tribunal (NCLT), Chennai Bench, has sanctioned the Scheme of Arrangement between TVS Holdings and its shareholders, paving the way for the proposed distribution of surplus reserves.
Record date fixed for shareholders
September 8 has been fixed as the Record Date to determine shareholders eligible to receive the preference shares. The total issue size is ₹986.52 crore and will be funded through the company’s general reserves and retained earnings.
The NCRPS will be redeemable within 15 months from the date of allotment and are proposed to be listed on the stock exchanges.
Company to deploy surplus reserves
TVS Holdings said it has accumulated substantial surplus reserves from retained profits over the years, which are higher than its current and foreseeable business requirements.
After considering expected free cash inflows and the availability of existing surplus reserves, the company concluded that the excess funds could be used more efficiently by rewarding shareholders.
Shareholders interest
Accordingly, TVS Holdings has proposed to distribute the surplus through fully paid-up preference shares issued as bonus shares under the sanctioned scheme.
The company said the scheme is in the interest of shareholders and is not detrimental to the interests of other stakeholders.