New Delhi: The Chandigarh Bench of the National Company Law Tribunal (NCLT) has convened a meeting of the shareholders and creditors of Jindal Stainless Limited (JSL) and Jindal Stainless (Hisar) Limited (JSHL) for approving the merger of the two companies, said JSL in a statement on Wednesday. The first motion petition was filed with NCLT in March 2021. The Board of JSL and group companies had approved the merger scheme in December 2020.
Commenting on this development, JSL MD Abhyuday Jindal said, "We've been waiting in anticipation for this order by NCLT. Work is on in full swing to complete the procedural requirements within the stipulated timeline. With our expansion underway, the merged company's capacity will be 2.9 million tons per annum by FY23, taking us to the league of top few stainless steel producing companies in the world." The merger will be effective from the appointed date of April 1, 2020.
Considering the present NCLT order, the company expects the completion of the merger in H1FY23, said JSL. The standalone proforma revenue of the merged entity for Q3FY22 and 9MFY22 stand at Rs 8,880 crore and Rs 22,896 crore, respectively. The corresponding EBITDA numbers are Rs 1,261 crore and Rs 3,444 crore.
The merger of JSHL in JSL will create a mega stainless steel conglomerate, which will propel Jindal Stainless among the top 10 global stainless steel producers even on its current capacity level, said the statement. The merged entity will have diversified end-to-end product portfolio of over 120 stainless steel grades with a 360-degree reach to customers from all segments. While JSL has largely been focused on high volume stainless steel offerings and has been actively catering to sectors like railway, architecture, automobiles and infrastructure, JSHL is focused on high-margin specialised product division and has been actively catering to value-added segments, like precision strips, razor blade and coin blanks and other niche offerings. JSL's port and raw material proximity, coupled with JSHL's strategically located facility in key domestic consumption centres, will harness better operational synergies. Besides, a single entity will have a simplified capital structure, stronger balance sheet and leverage ratios, will improve financial flexibility, and unlock value for all stakeholders.
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