Philips India, a subsidiary of Dutch major Royal Philips, on Monday passed a resolution in a court convened shareholders’ meeting to demerge its lighting division amid opposition from a section of minority shareholders.
In the meeting held here, some minority shareholders opposed the demerger and feared that the same was a precursor to hive-off the healthy business from the company in line with the parent company’s move.
In March, reports said the parent Royal Philips had agreed to sell 80.1 per cent stake in its lighting components division for USD 2.8 billion to Go Scale Capital, a technology fund that will seek to expand the company’s automotive and LED businesses.
“I want to ask in the last 25 years how many times the company has rewarded its shareholders? After delisting, now with demerger it seems you want to sell the lighting divison…,” minority shareholder M K Bubna said during the meeting.
Another shareholder, A K Banerjee questioning the intention of demerger said, “Was it actually necessary given the explanation provided.”
Bubna said, “Our opposition will not help as 97 per cent of stake is held by promoters.”
Philips India CEO Krishna Kumar did not take questions from the media.
The management also shied away from the question of Bubna and other shareholders for an assurance that the demerged entity Philips Lighting India will not be hived-off in near future.
Public shareholding in the Philips is only 3 per cent and shareholders will get shares in the new demerged lighting business on 1:1 basis.
The company in the notice to shareholders for demerger said the transfer and vesting of the lighting business in a separate company effective from February 1, 2016 in line with the global separation plan of the Philips.
After demerger, Philips India will have its healthcare and consumer lifestyle business.