Brief

D-Link (India) announces de-merger

K R Naik, Executive Chairman of D-Link (India) and A P Chen, CFO and Executive VP, D-Link Corporation announce the de-merger plans of D-Link

The Board of Directors of D-Link (India) has approved the proposal of restructuring the business of the company by a ‘Scheme of Arrangement’ at its Board Meeting.

The Scheme provides for de-merger of the business of sales and marketing of D-Link branded active networking products into one company namely D-Link (India) Ltd and the residual business of structured cabling systems, R&D, manufacturing and service operations into another company called Smartlink Network Systems Ltd. The Scheme is subject to the approval of shareholders, creditors and other approvals as may be required including that of stock exchanges, High Court of Mumbai, Foreign Investment Promotion Board and the Reserve Bank of India.

Each shareholder of D-Link (India) shall receive one equity share (of face value Rs. 2) in Smartlink Network Systems for each equity share (of face value Rs. 2) presently held in the company.

D-Link is one of the networking product brands globally. In India, besides sales and marketing of active networking products, the company is also engaged in other activities that are unique compared to D-Link operations globally. These include manufacturing, R&D and service of networking products as well as sales and service of SCS products.

Post completion of the steps involved in the de-merger process, the new D-Link (India) will have the business of sales and marketing of D-Link branded active networking products and the new company Smartlink Network Systems will have the business of manufacturing, R&D, sales and service of networking products and sales and marketing of SCS products.

The Board believes that the de-merger will result in focused business operations of the two companies and allow them increased flexibility in taking advantage of the huge growth opportunities in their respective business segments.

India represents one of the fastest growing markets for networking products and a strong focus on development of this business will further accelerate the growth in the healthy market share that D-Link branded active networking products enjoy in India.

Smartlink will drive both captive and contract manufacturing businesses at its ISO 9000 certified factory in Goa; R&D at its world-class centre in Bangalore with specific focus on VoIP and routing products; design and development, manufacturing, marketing and sales of branded Digi-Link Passive Structured Cabling Systems and provide nationwide service and support for networking products.

Speaking on the occasion, K R Naik, Executive Chairman of D-Link (India), said, “The de-merger will bring sharper focus to two distinct set of activities and allow both companies to chart independent long-term strategies. This will lead to accelerated growth of the businesses of both companies resulting in enhanced shareholder value.”

A P Chen, CFO and Executive VP, D-Link Corporation, said, “We are excited by the growth potential in the India Market for Active Networking Products and believe that further focused approach resulting out of this de-merger would help us accelerate our growth in India.”

Pursuant to the de-merger, the shares of Smartlink Network Systems will be listed on the Bombay Stock Exchange and the National Stock Exchange.