Jaiprakash Associates Merger With Unit Approved by NSE

New Delhi: Jaiprakash Associates' proposed merger of subsidiary Jaypee Sports International Ltd with itself has got approved from National Stock Exchange (NSE).

Jaypee Sports International Ltd (JPSIL) set up the motor race track Buddh International Circuit at Greater Noida in Uttar Pradesh. Formula One Grand Prix in 2011, 2012 and 2013 were held there.

At present, JPSIL is a wholly-owned subsidiary of the diversified Jaiprakash Associates group.

The amalgamation is aimed at having "greater synergies" between the two companies by consolidating the businesses.

The exchange conveyed in a communication to Jaiprakash Associates on October 8 that it has "no objection" to the deal. This would be valid for six months.

"The validity of this 'Observation Letter' shall be six months from October 8, 2014, within which the scheme shall be submitted to the High Court," the bourse said.

As per the draft scheme, the merger would result in focused management attention, improvement in operational efficiency and business prospects as well as on Jaiprakash Associates' profitability, among others.

All these factors are likely to improve the valuation of Jaiprakash Associates' shares and benefit the shareholders, it added.

According to the draft scheme, the interest of the secured and unsecured creditors would remain unaffected. Among others, JPSIL is setting up a cricket stadium in Uttar Pradesh. It became a public company in 2010.