[T.S.R:16520] Ispat Ind Acquired By JSW Steel At A Price of Rs 19.85 per share, Open Offer At Same Price...Stock Decline Possible

Ispat Industries Ltd has informed BSE that the Board of Directors of the Company at its meeting held on December 20, 2010, inter alia, has approved a Subscription Cum Shareholders Agreement ("SSHA") amongst the Company, JSW Steel Limited ("JSW") and the promoters of the Company. Pursuant to the SSHA, JSW shall become a Promoter of the Company. The agreement contemplates that the articles of association of the Company will be amended to incorporate the rights and obligations of the parties in the SSHA.

The Company has further informed about some of the important provisions of the SSHA including the following :

1. JSW Steel Ltd will subscribe on a preferential basis to 10,866,49,874 equity shares at an aggregate consideration of Rs. 2157,00,00,000 at a price of Rs. 19.85 per share in the Company and make an open offer as required under applicable regulations.

2. JSW and the existing promoters shall have right to participate in an agreed percentage in future capital issuances by the Company.

3. The name of the Company is proposed to be changed incorporating the name of both the major shareholders.

4. The existing promoters of the Company shall have certain affirmative rights on a list of matters till such time they maintain an agreed percentage shareholding.

5. Some of the provisions are subject to necessary approvals from relevant authorities.

6. Other customary provisions.

Board has also subject to necessary consents and approval (including court approval as may be required) approved to convert the existing 0.01% Cumulative Redeemable Preference Shares into equity shares at Rs. 19.85 per equity share.

Board has also decided to cancel the issue of 11,33,06,105 equity warrants to the identified promoters, on preferential basis.
 

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

 

Nothing in this article is, or should be construed as, investment advice.

 

 

 

 

 

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