Following the directive by the Bombay High Court, JSW Ispat and JSW Steel convened a separate shareholder meetings in Mumbai to seek their approval for the proposed merger of both these firms.
According to the merger proposal, every 72 shares of JSW Ispat would be exchanged for one equity share of JSW Steel. Institutional Investor Advisory Services advised shareholders to support the merger.
The proposed share exchange ratio values JSW Ispat at Rs 2,648.61 crore given the average three months share price of JSW Steel at Rs 757.70.
The valuation of JSW Steel is at a premium of just four per cent to its market cap, said the IIAS, noting that the average market capitalisation of JSW Ispat over the same period was Rs 2,548.79 crore.
JSW Ispat Steel, JSW Building Systems, JSW Steel Coated Products and JSW Steel proposed composite scheme of amalgamation.
Equity infusion, debt refinancing and rationalisation of working capital funding removed the complexity previously arising from the financial imbalance at JSW Ispat at the time of acquisition. The merger will catapult JSW Steel to the top league in the Indian steel sector.
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