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Tags: share swap | Sajjan Jindal | merger & acquisition | KPMG | JSW Steel Ltd. | JSW Steel |

JSW Ispat Steel Ltd. | BSE

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JSW Steel merges with JSW Ispat;share swap fixed at 1:72ET Bureau Sep 2, 2012, 06.49AM IST

MUMBAI: In separate meetings the boards of JSW Steeland JSW Ispat on Saturday approved a proposal to mergethe two companies that will create India's second-largestprivate steelmaker by capacity and pave the way for alarger role by Japanese steel major JFE.

The Sajjan Jindal-led JSW Steel, which had acquired theerstwhile Ispat Industries in 2010 for Rs 2,157 crore, willnow merge JSW Ispat with itself and gain from marketingsynergies and tax gains, officials of the two companies saidat a conference in Mumbai.

"The merger is an important step toward creating a world-class global steel company. JSW Ispat bringsseveral unique advantages and the transaction will help realise several integration benefits," said JSW Steelchairman Sajjan Jindal, who is the managing director of JSW Ispat.

One equity share of JSW Steel will be issued for every 72 shares of JSW Ispat. The merger will make theconsolidated JSW Steel, the second-largest in India at 14.3 million tonnes, a shade below SAIL which hasan installed capacity of about 14.5 million tonnes.JSW Steel will issue 1.86 crore new equity shares andincrease its outstanding shares to 24.17 crore and its equity capital to Rs 241.72 crore.

JSW Steel will also issue 48.54 crore new 0.01% non convertible cumulative redeemable preference sharesto the preference shareholders of JSW Ispat, increasing its preference share capital to Rs 764.44 crore.

Post merger, promoters of JSW Steel will own 35.12% in the merged entity, while 14.92% shall be held byJapan's JFE Steel. The remaining 49.96% will be held by the public shareholders. There is scope for JFE toincrease its shareholding as the earlier threshold of 15% for an open offer has been raised to 25%, saidone JSW official who asked not to be named.

The scheme is subject to approval of the High Court, lenders, creditors, preference shareholders, equityshareholders, BSE, NSE, the Competition Commission of India and other approving authorities. JSW Steelexpects to complete the process of merger by the end of this financial year. KPMG did the valuation forJSW Steel, while PWC was mandated for JSW Ispat.

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JSW Steel merges with JSW Ispat; share swap fixed at 1:72 - Economic ... http://articles.economictimes.indiatimes.com/2012-09-02/news/3353618...

2 of 2 12/8/2012 9:54 PM