LG Balakrishnan & Bros Ltd has informed that in order to provide greater focus to the business activities, the company proposes to demerge its forging division and transfer the division on a going concern basis to LGB Forge Ltd.

After the demerger, LGB Forge Ltd would focus on the forging division, which would help the company in increasing its focus on other business.

LG Balakrishnan is engaged in the manufacture of chains, rubber belts, steel forgings and related automotive components. LGB Forge is an un-listed public company incorporated for the purposes of carrying on businesses as manufacturers of forgings and castings.

As per the scheme of arrangement LGB Forge will issue one equity share for every one equity share held by the existing shareholder of LG Balakrishnan & Bros as on the record date.

LG Balakrishnan shares touched a high of Rs 25.20 on the BSE after the news. It ended the day at Rs 23.65, up Rs 2.55 or 12% over the previous close.