D-Link to be de-merged into two entities

Mumbai: Communications equipment major D-Link (India) has said that the company would be de-merged into two entities, as part of a restructuring programme.

D-Link’s businesses related to structured cabling systems, R&D, manufacturing and service operations would be consolidated into a separate company, called Smartlink Network Systems. On the other hand, D-Link India will be the name of the company managing the business related to the sales and marketing of D-Link’s branded active networking products.

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As part of the de-merger process, each shareholder of D-Link (India) Ltd will receive one equity share (of face value Rs 2) in Smartlink Network Systems Ltd for each equity share (of face value Rs 2) presently held in the company.

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Post the de-merger exercise, the shares of Smartlink shall be listed on the Bombay Stock Exchange and the National Stock Exchange, according to Jangoo Dalal, CEO & Managing Director, D-Link. “We believe that the de-merger will result in focused business operations for the two companies and allow them increased flexibility in taking advantage of the huge growth opportunities in their respective business segments,” Dalal, said.

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Stake holders

As per data available on the bourses, D-Link Corporation (through D-Link Mauritius Holding Inc) holds about 36.32 per cent stake in D-Link while KR Naik, the executive Chairman of D-Link (India), has a 26 per cent holding.

As part of the de-merger, there will be a share swap arrangement between Naik and D-Link Corporation, such that Naik will have a 62 per cent stake in Smartlink. In D-Link India (post the de-merger), D-link Corporation (Taiwan) will have a 60 per cent stake, while Naik will hold two per cent.

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People transfers

The de-merger process is expected to be completed in six to eight months. Of the 700 people currently working with company, 580 would be transferred to Smartlink, while 120 would be with D-Link India. The company is yet to take a call on who will be at the helm of affairs at the two companies.