Amritsar, NFA Post: Jindal Stainless (Hisar) Ltd (JSHL) will be merged into group company Jindal Stainless Ltd (JSL) in a share swap ratio of 1:1.95, subject to approvals from statutory authorities, shareholders, creditors, and NCLT, the company said in an exchange filing.
“The board of directors of Jindal Stainless Limited (JSL) and Jindal Stainless (Hisar) Limited (JSHL) today accepted the recommendations of the respective board committees and approved the merger of JSHL into JSL,” the company said.
According to the approved share swap ratio, 195 equity shares of JSL will be issued for every 100 equity shares of JSHL.
“The consolidation will enable harnessing of the complementing strengths of the individual companies. Seamless integration of infrastructure, processes and operational synergies, along with a strengthened balance sheet, would improve financial flexibility,” said JSL and JSHL Managing Director Abhyuday Jindal.
“This transition will also bolster the government’s ‘Atmanirbhar Bharat’ mission,” Jindal added.
He further said that the merger of JSL and JSHL will induce a simplified capital structure, expanding the turnover of the merged business to the tune of around 20,000 crore rupees.
The company also claims that with 1.9 million tonnes per annum melting capacity, the merged entity will be the only Indian Company in the league of top 10 stainless steel companies in the world.
The company has announced that post the merger, JSL will be the single listed entity on the stock exchanges, and the promoter holding will be about 57%, while the remaining 43% will be held by the public.
According to the proposed merger structure, the mobility business of JSL Lifestyle Ltd, a domestic subsidiary of JSHL, would be merged into JSL. Non-mobility businesses would be carved out as a separate new entity, named Jindal Lifestyle Ltd, the company added.
The company also pointed out that post restructuring, Jindal Stainless Steelway Ltd (JSSL) and Jindal Lifestyle Ltd will operate as Indian subsidiaries, while overseas operational subsidiaries of JSL in Spain and Indonesia will continue to operate as business units of merged JSL.
“With the appointed date of April 1, 2020, the merger process is expected to be completed in H2 FY22,” JSL said.