NCLT orders convening of shareholders and creditors meets
NCLT orders convening of shareholders and creditors meets
The first motion petition was filed with the tribunal last year
The Chandigarh Bench of the National Company Law Tribunal (NCLT) recently ordered for the convening of meetings of the shareholders and creditors of Jindal Stainless Limited (JSL) and Jindal Stainless (Hisar) Limited (JSHL) for approving the scheme of merger between the two companies.
Commenting on the development, Abhyuday Jindal, the managing director at JSL, stated, "We have been waiting in anticipation for this order by NCLT. Work is in full swing to complete the procedural requirements within the stipulated timeline. With our expansion underway, the merged company's capacity will be 2.9 million tons per annum by FY 2023. It will take us to the league of the top few stainless steel producing companies in the world."
The merger was effective from April 1, 2020. Considering the present NCLT order, the company expects the completion of the merger in H1FY23. The standalone proforma revenue of the merged entity for Q3FY22 and 9MFY22 stands at Rs.8,880 crores and Rs.22,896 crores, respectively. The corresponding EBITDA numbers are Rs.1,261 crores and Rs.3,444 crores.
The union of the two companies will create a mega stainless steel conglomerate, ranking the company among the top 10 global stainless steel producers. It will have a diversified end-to-end product portfolio of over 120+ stainless steel grades with a 360-degree reach to customers from all segments.
While JSL has largely focused on high volume stainless steel offerings and has catered to sectors like the railways, architecture, automobiles and infrastructure, JSHL focused on high-margin specialized product division. It has provided value-added segments including precision strips, razor blades, coin blanks and other niche offerings.
JSL's port and raw material proximity, coupled with JSHL's strategically located facility in the key domestic consumption centres, will harness better operational synergies. Besides, a single entity will have a simplified capital structure, stronger balance sheet and leverage ratios. As a result, it will improve financial flexibility and unlock value for all the stakeholders.
