Tata Steel today announced merging group firm Tata Metaliks,which is into pig iron manufacturing,with itself.
Besides,Tata Metaliks Kubota Pipes Limited,a 100 per cent subsidiary of Tata Metaliks,will also be merged with Tata Steel.
In a statement,Tata Steel said that its Committee of Directors and Board of Directors of Tata Metaliks and TMKPL have approved the merger.
“… its Committee of Directors and the Board of Directors of Tata Metaliks Ltd (TML) and Tata Metaliks Kubota Pipes Ltd (TMKPL),a 100 per cent subsidiary of TML,have approved the proposal of merger of TML and TMKPL with TSL through a scheme of amalgamation to be sanctioned through a court approval process,” Tata Steel said.
Tata Metaliks,in a separate filing to the BSE,said that the decision was taken yesterday by both the firms and subject to shareholders,creditors and regulatory approvals,the scheme of amalgamation of TML with TSL will come into effect from April 1,2013.
It added that Tata Metaliks will be amalgamated with Tata Steel followed by the dissolution of the company without winding up.
The public shareholders of TML will get 4 shares of Rs 10 each of TSL for every 29 shares of Rs 10 each of TML in terms of the scheme,it further said.
Tata Steel currently holds 50.09 per cent stake in Tata Metaliks.
“The scheme,inter alia,envisages synergies through aligning the activities of a single value chain within one legal entity,” the Tata Steel statement said.
Independent Chartered Accountants — SR Batliboi & Co LLP and Haribhakti & Co — have prepared the valuation reports for the merger,while ICICI Securities prepared the fairness opinion for the proposed merger.
Tata Metaliks,which was established in 1990,is based in Kolkata and has two pig iron manufacturing plants,having a capacity of 6.50 lakh tonnes per annum at Kharagpur in West Bengal and Redi in Maharashtra.
Besides,Tata Metaliks Kubota Pipes Ltd is a 100 per cent subsidiary of Tata Metaliks. The company was established in 2007 as a joint venture between TML,Kubota (Japan) and Metal One (Japan) for producing ductile iron pipes used for water distribution,mainly for the infrastructure sector.
Following the announcement,shares of Tata Metaliks rose nearly 8 per cent in the early morning trade on the BSE. At 1415 hours,shares of the company were up 0.67 per cent at Rs 45.40 apiece on the BSE.
Tata Steel scrip was being traded at Rs 301 on the BSE at 1415 hours,down 1.49 per cent from the previous close.