In a communication to stock exchange, JSW Steel said it received approval from 99.99 per cent of shareholders in a recent meeting for merging JSW Ispat Steel with the company.
Following this, the company awaits the approval of the Bombay High Court to complete the merger process.
The merger would make JSW Steel the second largest steel producer in the country. Post merger, JSW Steel will have an annual production capacity of 14.3 million tonne and become second largest domestic producer after SAIL.
Shareholders of JSW Ispat will get one JSW Steel share for every 72 shares they hold, according to the merger plan.
Moreover, JSW Ispat will transfer its Kalmeshwar undertaking and JSW Steel will transfer its downstream undertaking to JSW Steel Coated Products. Besides, JSW Building Systems will also be merged with JSW Steel.
Sajjan Jindal, Chairman of JSW Steel expects the merger to give the firm a lot of synergy in operation and economies of scale. It can now go for brown-field expansion at Vijayanagar in Karnataka and Dolvi in Maharashtra, he said earlier. Besides, it will also reduce the cost of borrowing for JSW Ispat and the merged entity is likely to get Rs 250 crore benefit from it.
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