Date:10/05/2005 URL: http://www.thehindubusinessline.com/2005/05/10/stories/2005051001730200.htm

Back Jindal Vijayanagar board approves merger of 3 cos

Our Bureau

Mumbai , May 9

JINDAL Vijayanagar Steel Ltd (JVSL) has informed the BSE that its board of directors has approved the acquisition of Euro Ikon Iron & Steel Pvt Ltd, Euro Coke & Energy Pvt Ltd and JSW Power Ltd (JPL) by way of merger with the company.

The appointed date for the merger is April 1.

Shareholders of Euro Ikon will be allotted one equity share of JVSL for every 16 shares of Euro Ikon. Shareholders of Euro Coke will be allotted one JVSL share for 19 shares of Euro Coke and JPL shareholders will get one JVSL share for every 25 shares of JPL.

The scheme is subject to consent and approval of shareholders, lenders, creditors of JVSL, Euro Ikon, Euro Coke and JPL, the Bombay High Court, and other regulatory authorities.

JVSL had entered into strategic tie-ups with these three companies for various projects. Euro Ikon is setting up the nine-lakh tonne blast furnace at a cost of Rs 295 crore. Euro Coke is setting up the 6.2-lakh tonne coke oven batteries plant at a cost of Rs 195 crore and JSW Power a 290-MW power plant at an estimated cost of Rs 530 crore.

JVSL is in the process of expanding its capacity from 2.5 million tonnes to 3.8 million tonnes per annum by March 2006.

While Euro Ikon, Euro Coke, 100 MW power plant of JPL commenced operations, the balance facilities of JPL are expected to start generating power in FY 2005-06.

"These facilities are part of the integrated operation of JVSL without which steel plant cannot be run optimally. It is of paramount importance to integrate these facilities as part of JVSL through acquisition to avoid any uncertainty in continuation of existing arrangements on expiration," JVSL said in a news release.

JVSL had appointed RSM & Co and ICICI Securities Ltd as consultants; Deloitte Haskins & Sells and ICICI Securities Ltd as valuers for this merger scheme.

Post-merger, the equity capital of JVSL will increase by Rs 17.99 crore consisting 1.80 crore shares of Rs 10 each.

JVSL said it would continue its focus on organic growth by expanding its capacity at low specific investment cost and also to expand through mergers and acquisitions.

"The company will also pursue to enhance vertical integration to gain further cost savings," the release said. JVSL board has appointed Dr Vijay Kelkar, former finance secretary, and Mr Sudipto Sarkar, senior advocate, as additional directors of the company. Mr S. Jambunathan will be the nominee director of UTI Asset Management Company Ltd. Mr Mehernosh Homi Kapadia has been appointed as Chief General Manager (Secretarial) and Company Secretary.