Board of directors of Bajaj Hindusthan Sugar & Industries (BHSIL), a sister company of Bajaj Hindustan (BHL), has approved its merger with UP-based Phenil Sugars Pvt. Ltd, which holds more than 99% in two companies.

Phenil Sugars has two plants in Basti and Walterganj in eastern UP, each with a capacity of about 6,000 tons crushed per day (TCD).

The merger is based on a share exchange ratio of one equity share of Bajaj Hindusthan Sugar and Industries Ltd of Re 1 each fully paid up for every two equity share of Phenil Sugars Pvt. Ltd of Rs 10 each fully paid up. The appointed date of merger is proposed to be 1 April, 2008.

Further, the board has also approved conversion of certain loan along with the loans borrowed by it from its future subsidiaries due to Bajaj Hindusthan Ltd into zero coupon secured optionally convertible securities.

The Bajaj group has 16 mills in UP, 10 mills owned by BHL and 6 by BHSIL post acquisition. Shares of the BHSIL gained Rs 3, or 12%, to settle at Rs 28. The total volume of shares traded was 8,996 at the BSE.