Kolkata, Nov 23 (IANS) In a bid to restructure the Titagarh Wagons Ltd's two business verticals, the board of directors of the company Friday approved its decision of demerger its rail coaches division and make the heavy earth moving and mining equipments division a wholly−owned subsidiary.
The board of the Kolkata−based wagonmaker at its meeting approved the demerger of its rail coaches division.
"The subsidiary shall allot 12 equity shares to the equity shareholders of TWL for every 100 shares held by them on a date to be fixed for the purpose," the company informed Bombay Stock Exchange (BSE).
"Rail coach making is entirely separate business from wagon manufacturing. We are getting into manufacturing coaches now. The demerger was required for its growth," Umesh Chowdhary, TWL vice chairman and managing director, told IANS.
The company in recent years has diversified its business operation with forays into manufacturing passenger coaches (EMUs) used in trains as part of the suburban mass rapid transport.
The board also approved that the heavy earth moving and mining equipment division would be a 100 percent subsidiary of the parent company.
"It will be a separate entity as it has great potentials to grow. Now we can employ a dedicated management team for the business," Chowdhary said.