Chembond Chemicals embarks on major reorganization with strategic demerger

Chembond Chemicals Limited (CCL), a prominent player in the chemical industry, has announced a comprehensive scheme of arrangement. This reorganization includes the demerger of its construction chemicals and water technologies businesses into Chembond Chemical Specialties Limited (CCSL) and the amalgamation of several other entities.

Aim of the Demerger:

The Board’s decision aims to create two independent listed verticals, empowering both entities to independently pursue growth strategies with a sharper focus. This move is expected to be value accretive for all stakeholders, enhancing business growth and acknowledging distinct risk and competition in each business.

Leadership’s Vision for Growth:

Sameer V. Shah, Chairman of Chembond Chemicals, emphasized the company’s growth and diversification over the years. The restructure, according to Shah, is to empower independent pursuit of growth strategies. Nirmal V. Shah, Managing Director, also highlighted that the scheme would allow for business growth while catering to distinct risks and competition in each business.

Details of the Demerger and Business Reorganization:

• Chembond Chemical Specialties Limited (CCSL): The construction chemicals business will demerge from CCL and consolidate in CCSL. CCSL will issue equity shares to CCL shareholders and will be renamed to Chembond Chemicals Limited.
• Chembond Material Technologies Limited (CMTL): The amalgamation of several companies into CCL will create a single entity for metal pre-treatment, coatings, sealants, and industrial adhesives businesses. CCL will be renamed to CMTL.

Approval and Implementation:

The composite scheme of arrangement is subject to the approval of shareholders, creditors, SEBI, NSE, BSE, NCLT, and other regulatory authorities. Upon approval, this strategic move will result in two listed entities, each focused on specific business lines in the chemical sector.

Conclusion and Future Prospects:

Chembond Chemicals’ decision to demerge and reorganize is a strategic step towards enhancing its market presence and business efficiency. This transformative endeavor positions the company for leadership in its respective sectors, aiming to unlock value for shareholders and stakeholders in the evolving landscape of the chemical industry.