ISMT Limited. (ISMT) (BSE: 532479; NSE: ISMTLTD), one of the largest integrated specialized seamless tube manufacturers in India, announced today the Scheme of Arrangement and Merger to amalgamate and consolidate its entire Undertaking business and operations with Kirloskar Ferrous Industries Limited (KFIL).
Details of the proposed Scheme are as under -
The appointed date of the proposed scheme is April 1, 2023
All the assets & property of ISMT immediately before the merger appointed date shall stand transferred to KFIL by virtue of the merger
All the liabilities of ISMT immediately before the merger appointed date shall stand transferred to KFIL by virtue of the merger
Shareholders holding not less than three-fourth in value of the shares in ISMT shall become shareholders of KFIL by virtue of the merger (other than shares already held therein by KFIL)
Commenting on the merger, Atul Kirloskar, Chairman, KFIL, said, "We acquired ISMT in March 2022, to enter into the seamless tubes market. For KFIL this was a step towards forward integration and product diversification. On the other hand for ISMT this was a step towards backward integration. This acquisition has brought us an opportunity to integrate iron ore to seamless tubes. Now taking a step further, we are proposing to integrate the entire business under the umbrella of Kirloskar Ferrous Industries Ltd. to reap the synergies between the two businesses."
Commenting on the rationale of this merger, R.V.Gumaste, Managing Director, KFIL, said, "As we complete two-quarters of the full operations of ISMT post-acquisition, our team has ensured smooth operations and is confident to move ahead in line with our expectations. We believe, the merger will result in a financially robust entity with a broader customer base covering the entire value chain. This will also help us improve operational efficiencies through standardization and simplification of business processes."
Commenting on the merger, Rahul Kirloskar, Chairman, ISMT, said, "ISMT became part of the Kirloskar Group in March, 2022. This was a step towards backward integration for ISMT products providing us an opportunity to integrate iron ore to seamless tubes. The debt restructuring done at the time of acquisition has provided ISMT with much-needed financial stability. Now, we would like to take a further step by merging our business with KFIL to leverage upon the management expertise bringing up the synergies between the two businesses for long-term sustainable growth."
Commenting on the rationale of this merger, Nishikant Ektare, Managing Director, ISMT, said, "ISMT's performance for the first two-quarters post-acquisition has been satisfactory. With the positive change in the net worth of the Company, ISMT improved its top line as we could qualify for more orders.We believe the brand Kirloskar will help our products to reach out to a broader client base covering the entire value chain. Also, the improvement and standardization of business processes will help in the effective use of available resources."
Shares of ISMT Limited was last trading in BSE at Rs. 62.10 as compared to the previous close of Rs. 55.70. The total number of shares traded during the day was 128197 in over 2204 trades.
The stock hit an intraday high of Rs. 62.75 and intraday low of 56.20. The net turnover during the day was Rs. 7715856.00.
Shares of Kirloskar Ferrous Industries Ltd was last trading in BSE at Rs. 276.60 as compared to the previous close of Rs. 267.40. The total number of shares traded during the day was 61525 in over 1811 trades.
The stock hit an intraday high of Rs. 281.00 and intraday low of 266.65. The net turnover during the day was Rs. 16910260.00.