APL Apollo Tubes Limited approves merger of Shri Lakshmi Metal Udyog Ltd and Apollo Tricoat Tubes Ltd with itself

The Board of Directors of APL Apollo Tubes Limited ("Company"), at its meeting held today, i.e., on February 27, 2021, has considered and approved a draft scheme of amalgamation of Shri Lakshmi Metal Udyog Limited ("Shri Lakshmi") and Apollo Tricoat Tubes Limited ("Apollo Tricoat") with the Company and their respective shareholders and creditors, as may be modified from time to time ("Scheme"), under Sections 230 to 232 of the Companies Act, 2013.

The Scheme is subject to receipt of approvals from the shareholders and creditors of the Company as may be directed by the National Company Law Tribunal, Delhi bench ("NCLT"), BSE Limited, National Stock Exchange of India Limited and approval of other regulatory or statutory authorities as may be required.

The Audit Committee and the Independent Directors have furnished their respective reports to the Board recommending the Scheme.

As the entire, issued, subscribed and paid up share capital of Shri Lakshmi is held by APL Apollo and its nominees, upon the Scheme being effective, notwithstanding anything contrary in this Scheme, the said Equity Share Capital of Shri Lakshmi shall stand automatically cancelled and there will be no issue and allotment of shares to APL Apollo or the nominees as APL Apollo and its nominees are the only shareholders of Shri Lakshmi.

Upon coming into effect of the Scheme and in consideration for the amalgamation of Apollo Tricoat into and with APL Apollo pursuant to the Scheme, APL Apollo shall, without any further act or deed and without receipt of any cash, issue and allot to the shareholders of Apollo Tricoat as on the Record Date other than the stake held by Shri Lakshmi i.e. 1,69,70,000 equity shares of Rs. 2 each to the extent of 55.82% which is being cancelled owing to its amalgamation with APL Apollo, one (1) equity share of Rs 2 each of APL Apollo for every 1 (one) equity share of Rs. 2 each of Apollo Tricoat.

The share exchange ratio for the shares to be allotted to the shareholders of Apollo Tricoat as a consideration for the amalgamation, is based on the report, dated February 27, 2021 issued by SSPA & Co. Chartered Accountants and Registered Valuer (the "Valuation Report"). Further, the fairness opinion dated February 27, 2021 issued by Fortress Capital Management Services Private Limited, a SEBI Registered (Category-1) Merchant Banker has confirmed that the share exchange ratio recommended by the valuers under the Valuation Report is fair and reasonable. The aforesaid Valuation Report and Fairness Opinion have been duly considered by the Audit Committee of APL Apollo and Apollo Tricoat and the Board of Directors of APL Apollo, Shri Lakshmi and Apollo Tricoat.

The amalgamations would result in the following benefits:

- Combined business under "APL Apollo" brand with wide product offerings and geographical footprint leading to a stronger market presence, to be best suitable for long term growth market;

- Amalgamation shall result in consolidation of the respective operations served by one platform thereby leveraging the capability of APL Apollo;

- Shri Lakshmi and Apollo' Tricoat operate businesses that complement each other, the combination to result in stronger consolidated revenue and profitability, with diversification in product portfolio thereby reducing business risks for mutual benefit of the shareholders of the companies;

- Ensuring a streamlined group structure by reducing the number of legal entities in the group structure, and thereby eliminating inter-company transactions, administrative duplications and consequently reducing the administrative costs of maintaining separate companies;

- Pooling of assets, proprietary information, personnel, financial, managerial and technical resources of the companies, thereby contributing to the future growth of the Amalgamated entity; and

- Overall reduction in administrative, managerial and other expenditure and achieving productivity gains and logistical advantages by pooling technologies for optimum utilization of various resources.

Shares of APL APOLLO TUBES LTD. was last trading in BSE at Rs.1070 as compared to the previous close of Rs. 1060.45. The total number of shares traded during the day was 7480 in over 569 trades.

The stock hit an intraday high of Rs. 1087 and intraday low of 1025.65. The net turnover during the day was Rs. 7998004.

Shares of Apollo Tricoat Tubes Ltd was last trading in BSE at Rs.924.25 as compared to the previous close of Rs. 916.4. The total number of shares traded during the day was 53157 in over 2589 trades.

The stock hit an intraday high of Rs. 936 and intraday low of 900. The net turnover during the day was Rs. 49075134.

Source : Equity Bulls

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