JSW Ispat Special Products announces slump sale of Raipur facility to Mivaan Steels

JSW Ispat Special Products Limited (formerly known as Monnet Ispat and Energy Limited) has manufacturing facilities at Raigarh and Raipur.

The Company ("Transferor") is proposing to transfer the Specified Undertaking, on a going concern basis, by way of a slump sale through a scheme of arrangement under the Companies Act, 2013, to Mivaan Steels Limited ("Transferee"/ "MSL"), upon it becoming a wholly owned subsidiary of the Company, subject to necessary approvals and terms of the Scheme ("Proposed Transaction").

The "Specified Undertaking" means the business undertaking of the Company pertaining to the manufacturing facilities at Raipur and mining facilities at Kanker and associated coal washery operations at Patherdih and certain other assets and properties.

The manufacturing facilities at Raipur comprises of a sponge iron manufacturing plant with a capacity of 0.3 MTPA, ferro alloy plant and steel manufacturing plant with a capacity of 0.25 MTPA.

The profile of the products produced at the manufacturing facilities at Raipur pertain to the commodity grade market that caters to the structural and construction sectors with comparatively lower volume of production and serving customers predominantly around its operating area whereas, the focus of the other facility of the Company at Raigarh is on special steel products catering to HT grades, IBR grades, RDSO grades, automotive, high manganese grades, cold rolling grades and API grades with comparatively higher volume of production, serving customers in the exports and domestic markets covering Northern, Eastern and parts of Western region of India.

The consideration to be received from such sale is Rs. Rs. 443.11 crore to be paid by MSL in cash, debt (including its debt securities), its preference shares and/or a combination of the foregoing and on terms and conditions as mutually agreed between the Company and MSL.

The Company is engaged in the business of manufacturing and dealing in steel and allied products. The Company along with all its subsidiaries had a consolidated turnover of Rs. 4,187.74 crore in FY 2020-21.

With the transfer of the Specified Undertaking through the Proposed Transaction, the Company will be able to focus on special steel products and explore and develop markets for its special steel products. Accordingly, with a view to achieve dedicated management focus on their respective grades of products and customer segments, facilitate strategic opportunities (including fund raising prospects), maximize value, increase efficiencies and enhance administrative control, the Company proposes to transfer the Specified Undertaking to the Transferee Company upon it becoming a wholly owned subsidiary of the Company. This is expected to create and enhance stakeholders' value by unlocking the intrinsic value and growth potential for the respective businesses of the Transferor Company and Transferee Company.

Shares of JSW Ispat Special Products Limited was last trading in BSE at Rs. 34.90 as compared to the previous close of Rs. 35.00. The total number of shares traded during the day was 365107 in over 1636 trades.

The stock hit an intraday high of Rs. 35.95 and intraday low of 34.75. The net turnover during the day was Rs. 12916493.00.

Source : Equity Bulls

Keywords

JSWIspatSpecialProducts INE743C01021 SlumpSale MivaanSteels