Sujana group cos’ amalgamation gets shareholders nod
The scheme of arrangement between Sujana Metal Products Ltd (SMPL) and Sujana Towers Ltd (STL) and the amalgamation of Sujana Steels Ltd (SSL) with SMPL has been approved by the requisite majority of their shareholders at respective meetings held on December 28, 2006 as per orders of the High Court of Andhra Pradesh.
While approving the scheme of arrangement between SMPL and STL, IDBI Bank Ltd, one of the secured creditors of SMPL, suggested some modification in the scheme subject to which they voted in favour of the scheme.
The committee of Board of Directors of the Company in its meeting held the same day took note of them. The modifications, however, do not impact the proposed demerger/merger ratio, a press release from the company said.
Similar meetings in respect of STL, a newly formed company, were dispensed with by the High Court.
SMPL is a Hyderabad-based manufacturer of CTD and TMT bars, structural steel and design and fabrication of Transmission Towers (both power and telecom). The business of SMPL is being restructured by hiving off the structural mill, galvanising and transmission tower fabricating facility into a new company called Sujana Towers Ltd (STL), which will be a pure play, integrated towers company.
Restructuring
SMPL holds about 27 per cent of the current equity of an associate, Sujana Steels Ltd (SSL-formerly Padmini Corporation Ltd) that has just commissioned a capacity of 140,000 tonnes to manufacture various hot rolled steel products in Chennai. This plant is designed for a capacity of 250,000 TPA.
SSL will get merged with the residual SMPL consisting of the facility of for CTD and TMT bars and trading division to form a larger steel rolling and trading Company.
The current paid up equity share capital of Rs 38.83 crore of SMPL consisting of 3.883 crore equity shares of Rs 10 each will be split equally between STL and the residual SMPL. A broad split of other assets and liabilities has also been worked out.
Simultaneously, the face value of equity shares of STL and residual SMPL will be reduced to Rs 5 paid up shares each. Thus, current shareholders of SMPL will get one equity share of Rs 5 each in STL and residual SMPL in place of one equity share of Rs 10 in SMPL at present.
In the demerged balance sheet, STL has a debt of Rs 33. 2 crore.
Post-split, STL will have an equity of Rs 19.4 crore, comprising 3.88 crore shares of Rs 5 each.
The steels division of SMPL had revenues of Rs 135.7 crore and PAT of Rs 4.24 crore for the quarter ended September 30,2006.
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