SRBS to merge with its parent co JBSL
Shri Ramrupai Balaji Steels Ltd (SRBS), a subsidiary of the Jai Balaji group, is set to merge with the parent company, Jai Balaji Sponge Ltd (JBSL) with effect from April 1, 2006.
By TNN |
KOLKATA: Shri Ramrupai Balaji Steels Ltd (SRBS), a subsidiary of the Jai Balaji group, is set to merge with the parent company, Jai Balaji Sponge Ltd (JBSL) with effect from April 1, 2006.
The merger proposal was approved by the board of the respective companies at separate meetings held in Kolkata on August 28. Both companies have informed stock exchanges on Monday.
As per the proposal, Shri Ramrupai Balaji shareholders will get one share of JBSL for every three shares of SRBS held by them. The valuation was done by chartered accountant firm Singhi & Co and Microsec Ltd. This was stated by Mr Aditya Jajodia, chairman and managing director of the Jai Balaji group.
Post merger, the new entity’s paid up capital and shareholding pattern will undergo a change. While JBSL’s paid up capital will stand enhanced to Rs 47.12 crore, the promoters’ holding will also increase by four to five percent to 62-63%.
The promoters of the Jai Balaji group, Kolkata based Jajodias, currently hold some 59% of JBSL’s total paid up capital of Rs 25.11 crore and 70% of SRBS’s paid up capital of Rs 66 crore.
ADVERTISEMENT
Incidentally, Jai Balaji group has a capacity to produce 0.5 million tonnes per annum of steel through JBSL and SRBSL. The group is looking to expand its steel manufacturing capacity to 0.8 million tonnes per annum by March 2007. Subsequent plans are to expand capacity by another 1.2 million tonne per annum for manufacture of speciality steels. This is expected to be operational by December 2009. Total investment will be nearly Rs 2,000 crore.
The proposed project, to be implemented in a phased manner, will be financed by a mix of internal accruals and debt.
To part finance the proposed expansion, the group is contemplating raising capital through gross depository receipts (GDRs) or foreign currency convertible bonds (FCCBs) in the near future. An overseas float, however, may further dilute the promoters’ holding in group flagship Jai Balaji Sponge Ltd.
Start a SIP with as low as ₹500 with ET Money App!
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
