Shares of Jain Irrigation Systems Limited (JISL) surged over 12 percent in the early trade on June 22 after it announced the merger of its international business.
Jain Irrigation shares were seen trading at a two-month high of Rs 43.80 at the opening, up over 12 percent since yesterday's close of Rs 37.50.
The company on June 21 that its board has decided to merge its international irrigation business with Rivulis Pte Ltd, a part of Singapore's Temasek Group, to create global irrigation and climate major and considerably reduce the company's debt.
"Combined entity will have $ 750 million in revenue," Anil Jain, CEO of Jain Irrigation told CNBC TV-18. "Merger of international business with Temsek will lead to the outgo of $350 million of revenues."
JISL will merge the Rs 4,200-crore irrigation business with Rivulis and Rs 2,700 crore of the farm business turnover will be used to repay its all overseas debt and Rs 200 crore will come to the parent company.
The merged entity will "create a global Irrigation and Climate leader - being 2nd largest in the world with $750 million in revenues," according to a stock exchange announcement. While Temasek will hold 78 percent of the merged entity, Jain International Business will have 22 percent.
"This transaction once closed will result into substantial reduction in the company’s consolidated debt approximately by 45 percent (approximately Rs 27 billion) and reduce the interest cost," Company Secretary AV Ghodgaonkar said.
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