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JSW Steel-Ispat merger clears legal hurdle

JSW Steel-Ispat merger clears legal hurdle
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On May 3, 2013, the Bombay High Court cleared the Composite Scheme of Amalgamation and Arrangement between JSW Steel and JSW Ispat Steel, both the firms informed the Bombay Stock Exchange (BSE).

Post-merger, promoters of JSW Steel will hold 35.12 per cent in the merged entity, while company’s second largest shareholder JFE Steel holding will come down to 14.92 per cent. JFE had about 15 per cent stake in JSW Steel till the time of merger announcement in September last year.

This paves the way for the company to become second largest steel producer in the country after SAIL. On January 30, shareholders and creditors of the two companies had approved the merger.

Shareholders of JSW Ispat will get one JSW Steel share for every 72 shares they hold, according to the Scheme. Further, 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.

The Scheme will become effective only upon receipt of the certified copy of the order of the High Court and on compliance with the requisite formalities, the companies informed.

The scheme will enable JSW Steel to raise its production capacity to 14.3 million tonne (mn t) per annum from existing 11 mn t and it will become second largest domestic producer after SAIL.

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