Mahindra Automotive takes over the Chakan unit
of AFL
Mahindra Automotive Steels Ltd has announced that pursuant to a
Scheme of Arrangement between the Company and AFL (Amforge Industries
Ltd), the Chakan unit of AFL was demerged as a going concern together
with all the assets and liabilities and was transferred to and vested
in the Company with effect from April 01, 2005. The said scheme was
sanctioned by the High Court at Bombay on March 21, 2006.
As a result of the above AFL now does not undertake any activity in
relation to forgings of the nature earlier undertaken by it at the
Chakan Unit. AFL however still undertakes certain types of forgings of
small parts and those in relation to two wheeler vehicles at its other
units.
Subsequent to the demerger, AFL and the promoters of AFL have agreed
to enter into Non-Compete Agreements with the Company agreeing not
carry on business in respect of forging product parts/components in
all forms (raw, semi finished, finished, machined etc) used in
automobiles, other than those used in two wheeler vehicles and certain
other specific parts which are presently manufactured by AFL at its
facilities at Bhandup and Chinchwad.
The Non - Compete Agreements are for a period of 7 years and
consideration paid is Rs 2 Crores to AFL and Rs 3 Crores to promoters.
Source: Equity Bulls
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