Whirlpool of India Limited has successfully obtained shareholder approval for a significant amendment to its Articles of Association (AoA) through a postal ballot. The special resolution to alter the company's AoA was passed with an overwhelming 99.995% of votes in favor.

Key Highlights of the Approved Changes

• Deletion of Articles: The company has removed Articles 4, 4A, and 108A from its AoA.
• Removal of Existing Provisions: The amendment eliminates provisions related to Financial and Technical Collaboration Agreements with Whirlpool and trademark usage conditions.
• ICICI Nominee Director: Provisions regarding ICICI nominee directors have also been removed.

Rationale Behind the Amendments

The approved deletions are strategically aligned with changes in Whirlpool's shareholding structure and aim to ensure business continuity. The amendments reflect the company's evolving relationship with its parent company and the modernization of its governance structure.

Articles Deleted

1. Article 4: Pertained to Financial and Technical Collaboration Agreements with Whirlpool Corporation.
2. Article 4A: Concerned the use of the "Whirlpool" trade name and conditions for its withdrawal.
3. Article 108A: Related to the appointment of nominee directors by ICICI Bank, now redundant due to repayment of borrowings.

Impact on Shareholders

The approval of these amendments suggests a potential change in Whirlpool Corporation's relationship with its Indian subsidiary. However, the company has previously executed new Brand Licence and Technology Licence Agreements with Whirlpool Corporation and its affiliates, which are designed to maintain business continuity and support from the parent company, regardless of potential ownership changes.

Significance of the Amendment

This amendment marks a significant step in Whirlpool India's corporate evolution. By removing outdated provisions and aligning its AoA with current operational realities, the company is positioning itself for greater flexibility and efficiency in its operations.

Investors and stakeholders should view this development as part of Whirlpool India's ongoing efforts to optimize its corporate structure and governance practices. The overwhelming shareholder support for the amendment indicates strong alignment between the company's strategic direction and shareholder interests.

As Whirlpool of India Limited continues to adapt to changing market dynamics and corporate relationships, shareholders and potential investors should stay informed about further developments that may impact the company's operations and market position.

Whirlpool of India Limited has announced a series of strategic agreements with its parent company, Whirlpool Corporation, and its affiliates, marking a significant shift in its operational structure. The company has also approved amendments to its Articles of Association, subject to shareholder approval.

Key Agreements

Whirlpool of India has executed five major agreements:

1. Brand License Agreement (BLA): A 30-year deal with Whirlpool Properties, Inc., granting exclusive rights to use the 'Whirlpool' brand in India and neighboring countries.

2. Technology License Agreement (TLA): An agreement with Whirlpool Corporation for exclusive access to technical intellectual property.

3. Services Agreement: A contract with Whirlpool Asia LLP for providing engineering and technical services.

4. Transitional Services Agreement (TSA): An arrangement with Whirlpool Corporation to ensure business continuity during ownership changes.

5. Intellectual Property Assignment: Whirlpool Corporation has assigned 24 Indian patents and 8 designs to Whirlpool of India.

Financial Implications

The agreements come with significant financial terms:

• 1.25% for 6th and 7th years
• 1.5% thereafter
• Guaranteed Minimum Royalty: USD 6 million annually for first 10 years, increasing to USD 12 million for years 21-30 | | Technology License (TLA) | - 0.60% royalty on quarterly net sales until March 31, 2029
• 0.65% thereafter | | Services Agreement | - 18% markup on actual costs incurred
• Guaranteed minimum service charges based on percentages of a reference amount of INR 186 crore | | Transitional Services | - USD 3 million per annum from April 1, 2026, to March 31, 2029, for services received
• USD 4 million (pro-rata) until March 31, 2026, for services provided | | IP Assignment | Nominal amount of USD 20, plus USD 10 each for confirmatory assignment deeds |

Strategic Implications

These agreements signify a restructuring of Whirlpool of India's relationship with its parent company. The long-term brand and technology licenses secure the company's access to crucial intellectual property and the Whirlpool brand, even as the parent company may reduce its ownership stake.

Amendments to Articles of Association

The company has approved amendments to its Articles of Association, removing provisions linked to Whirlpool Corporation holding at least 51% shareholding. This change suggests a potential reduction in the parent company's stake in the future.

Market Impact

These agreements provide Whirlpool of India with a clear operational framework for the coming decades. The guaranteed royalties and service charges represent significant ongoing financial commitments but also ensure continued access to global technology and brand value.

Future Outlook

These agreements position Whirlpool of India for potentially more independent operations while maintaining strong ties with the global Whirlpool network. The company's ability to leverage these agreements for growth in the competitive Indian appliance market will be crucial in the coming years.