ArcelorMittal to appoint 3 directors on Uttam Galva board

MUMBAI: ArcelorMittal Netherlands BV would appoint three directors on the board of Uttam Galva following its agreement with the promoters of the company, R K Miglani and associates, to acquire their 5.6 per cent stake, a top official said.

"We are not expecting any major changes in the way the company is running currently. There will be a joint management and equal number of directors. The mix would include three directors from the existing promoters and three from co-promoters, Uttam Galva Steels Director (Commercial) Ankit Miglani told reporters here.
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On September 3, R K Miglani and associates signed a co-promotion agreement with ArcelorMittal Netherlands BV. This agreement gives the two co-promoters joint control rights.

The agreement with ArcelorMittal will help in getting raw material security because "we will have access to source hot rolled coil. We are currently importing atleast half of our raw material requirement along with other products" Miglani said.

This will give Uttam Galva access to a huge product mix that it can import and market in India. It will give the company access to huge technology and best practices "which will allow us to enhance our product mix and help us grow the company exponentially," he said.

ArcelorMittal would launch an open offer for the acquisition of 29.4 per cent shares in Uttam Galva, a leading producer of cold rolled steel, galvanized products and colour coated coils and sheets, on Monday.

The open offer price at Rs 120 a share represents a 27 per cent premium over the two weeks average price and 85 per cent premium over the 6-month average price. The transaction value for 35 per cent stake is Rs 500-crore implying an estimated enterprise value of Rs 2,800-crore, the company said in a statement.

ArcelorMittal Netherlands BV will hold 35 per cent equity in Uttam Galva if 29.30 per cent of shares are tendered in the open offer.

In the event that the open offer made by ArcelorMittal Netherlands BV is under-subscribed, the Miglani family would offer ArcelorMittal Netherlands BV such number of shares so as to ensure that the shareholding of both the co-promoters is equal.

Uttam Galva has its main operating facility in Khopoli near Mumbai and has 1,400 employees.