Moneycontrol PRO
Upcoming Webinar:Watch a panel of experts discuss: Challenges of continuously evolving regulation for Cryptocurrency, on 7th July at 3pm. Register Now

JISPL, CSSL merger with JSW Steel gets board of directors' nod

The planned merger is intended to result in cost savings, better alignment, coordination, and streamlining of the units' day-to-day operations, among other things.

May 27, 2022 / 06:23 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

The Boards of Directors of JSW Steel Limited, Creixent Special Steels Limited, and JSW Ispat Special Products Limited on May 27 approved a scheme of arrangement for the merger of JISPL and CSSL with and into JSW Steel, JSW Ispat Special Products Limited said in a statement.

The scheme is subject to the approval of JSW Steel, JISPL, and CSSL's respective shareholders and creditors, stock exchanges (namely, BSE Limited and National Stock Exchange of India Limited), the Securities and Exchange Board of India (Sebi), the National Company Law Tribunal (NCLT), and the Competition Commission of India (CCI), as well as any other regulatory approvals that may be required.

As per the statement released by JSW Ispat Special Products, the companies are in similar and/or complementary businesses, and their proposed merger will produce synergies between them, including through the pooling of financial, managerial, technical, distribution, marketing, and other resources.

It added that the planned merger is intended to result in cost savings, better alignment, coordination, and streamlining of the units' day-to-day operations, among other things.

Further, as per the planned merger, JISPL will be able to obtain iron ore from JSW Steel's captive iron ore mines, which are closer to JISPL than JSW Steel's merchant iron ore mines. It is mentioned that the overall cost of procurement will be reduced as a result of such combined sourcing of raw materials. JSW Steel may also supply coke for JISPL's production activities, lowering procurement costs even further.

Close

The proposed amalgamation is expected to simplify the existing corporate structure and eliminate administrative duplication, thereby reducing the administrative costs of maintaining separate companies while reducing the multiple legal and regulatory compliances.

Commenting on the announcement, Seshagiri Rao MVS, Joint Managing Director & Group CFO of JSW Steel said, “The amalgamation will not only increase efficiencies and enhance administrative control but will also create and enhance stakeholders’ value by unlocking the intrinsic value and growth potential for the respective businesses of JISPL, CSSL, and JSW Steel. When we acquired Monnet Ispat & Energy as a distressed entity in 2018 with AION as our partner, our aim was to turn the company around and metamorphosize it into a sustainable business on its own before merging it with JSW Steel. Now that the company is profitable and thriving, we believe this is the right time to bring it into the fold of JSW Steel and leverage the synergistic benefits of the combined entity.”

Jyotin Mehta, Chairman of the Board of JISPL said, “The amalgamation will help JISPL shareholders become a part of world class steel player and participate in its growth story.”

Upon the scheme's implementation, "JSW Steel will issue three fully paid up equity share(s) of Rs 1 each of JSW Steel to the equity shareholders of CSSL (other than JSW Steel) as on the record date for every two fully paid up equity share(s) of Rs 10 each held by such equity shareholders of CSSL".

"JSW Steel will also issue one fully paid up equity share(s) of Rs 1 each of JSW Steel to the equity shareholders of JISPL (other than JSW Steel) as on the record date for every 21 fully paid up equity share(s) of Rs 10 each held by such equity shareholders of JISPL; and one fully paid up equity share(s) of Rs 1 each of JSW Steel to the preference shareholders of JISPL as on the record date for every 21 fully paid up compulsorily convertible preference share(s) of Rs 10 each held by such preference shareholders of JISPL," the press statement added.
Moneycontrol News
first published: May 27, 2022 06:20 pm
Sections
ISO 27001 - BSI Assurance Mark