The Business Bytes
PRIYABRAT BISWAL
BHUBANESWAR, DEC 29
Hisar-based Jindal Stainless (Hisar) Ltd (JSHL) on Tuesday said its board has approved the company’s merger into the country’s largest stainless steel maker Jindal Stainless Ltd (JSL).
In a joint statement, JSHL and JSL claimed the merger will create a mega stainless steel entity that will be among the top-10 stainless steel companies in the world and the largest stainless steel company in India.
The consolidation of businesses will recast the merged entity as an integrated, modern and ‘state-of-the-art’ manufacturing facility, bringing the diversified technology, talent and R&D under one roof. The merger will lead to the realisation of enhanced operational synergy, with JSL’s proximity to port and raw materials, along with world-class finishing lines, and JSHL’s strategic location around key domestic consumption centres. Furthermore, the merged entity will present reinvestment opportunities for growth by leveraging ready infrastructure at Jajpur for cost-efficient Brownfield expansions, the statement said.
“The consolidation will enable harnessing of the complementing strengths of the individual Companies. Seamless integration of infrastructure, processes and operational synergies, along with a strengthened balance sheet, would improve financial flexibility,” said Abhyuday Jindal, Managing Director, JSL & JSHL.
“The merger of JSL and JSHL will also induce a simplified capital structure, expanding the turnover of the merged business to Rs 20,000 crore. With 1.9 MTPA melt capacity, the merged entity will be the only Indian Company in the league of top 10 stainless steel companies in the world,” he added.
Post the merger, JSL will be the single listed entity on the stock exchanges and the promoter holding will be 57%, while the remaining 43% will be held by the public.
As per the proposed structure, the mobility business of JSL Lifestyle Limited, a domestic subsidiary of JSHL, would be merged into JSL. Non-mobility businesses would be carved out as a separate new entity, named Jindal Lifestyle Limited. Post restructuring, Jindal Stainless Steelway Limited (JSSL) and Jindal Lifestyle Limited will operate as Indian subsidiaries, while overseas operational subsidiaries of JSL in Spain and Indonesia will continue to operate as business units of merged JSL.
With the appointed date of April 1, 2020, the merger process is expected to be completed in H2 FY22.
