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Jindal Stainless seeks shareholders' approval for business rejig

The approval has been sought through postal ballot. Last month, the company received stock exchanges' nod for the proposed demerger.

PTI|
Updated: Apr 13, 2015, 10.50 PM IST
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The approval has been sought through postal ballot. Last month, the company received stock exchanges' nod for the proposed demerger. 
The approval has been sought through postal ballot. Last month, the company received stock exchanges' nod for the proposed demerger. 
NEW DELHI: Debt laden Jindal Stainless today sought shareholders' approval for major restructuring exercise with investors and creditors including by way of spinning off its business into four companies.

In a regulatory filing, the company sought the approval of public shareholders on the composite scheme of arrangement between Jindal Stainless, Jindal Stainless (Hisar), Jindal United Steel and Jindal Coke and their respective shareholders and creditors.

The approval has been sought through postal ballot. Last month, the company received stock exchanges' nod for the proposed demerger, a move aimed at boosting profitability and paring debt.

At present, the steel maker's debt stands at around Rs 8,500 crore, a company source said, adding that this will come down by Rs 5,000 crore post-restructuring.

According to the sources, this Rs 5,000 crore debt will be borne by the three new companies which will help Jindal Stainless to complete the Corporate Debt Restructuring (CDR) programme, which has been underway since 2012.

In December, the company's board had approved the plan. Under the scheme, Jindal Stainless proposes to demerge its ferro alloys and mining divisions and vest them with Jindal Stainless (Hisar). It will also transfer stainless steel making facilities in Hisar to Jindal Stainless (Hisar) for a lump sum consideration of over Rs 2,809 crore.

Jindal Stainless will transfer the hot strip plant located in Odisha to Jindal United Steel by way of slump sale for Rs 2,412.67 crore, the company had earlier said.

The company also had proposed to transfer its coke oven plant in Odisha to Jindal Coke by way of a slump sale for Rs 492.64 crore.

Once the rejig scheme becomes effective, Jindal Stainless (Hisar) would seek listing of its equity shares on both the exchanges and its global depository receipts (GDR) at the Luxembourg Stock Exchange.

Jindal Stainless scrip closed at Rs 39.40, up 2.60 per cent, on the BSE.
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