Escorts Limited To Merge Three Group Firms With Self, Consolidate Stake-The Economic Times

The Economic Times reported that Escorts Ltd has decided to merge three group firms - Escorts Construction Equipment Ltd (ECEL), Escotrac Finance & Investments Pvt Ltd (ESCOTRAC) and Escorts Finance Investment & Leasing Pvt Ltd (EFILL) - with itself, a move that will allow the promoters to consolidate their control in the group flagship. ESCOTRAC, EFILL and Escorts own shares in each other while ECEL is a wholly owned subsidiary of Escorts. ESOCTRAC and EFILL own 12.83% and 6.5%, respectively, in Escorts, while Escorts owns 49.81% in the two companies. ESOCTRAC and EFILL own 49.81% each other. The merger of these companies will result in two things. First, the equity base of Escorts will expand because of the merger of the wholly owned subsidiary with the parent company. Second, Escorts will issue own shares to either a trust or a group holding company in lieu of the ESOCTRAC and EFILL shares in the Company that will get extinguished. The merger process is expected to be completed by June or July this year, said an executive.