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Tata Steel, TRF call off amalgamation scheme

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Tata Steel and TRF have called off their plan to amalgamate the two companies after TRF has managed to turnaround its business operations with significant support from Tata Steel.

This scheme of amalgamation was announced in September 2022. On Wednesday, the boards of both the companies notified exchanges that they will not be going ahead with it.

In response, shares of TRF surged to their highest level in 16 months, and were locked in a 20% upper circuit at 327.70 rupees on the NSE. Shares of Tata Steel also rose to an over 2-year high.

Tata Steel — the promoter of TRF — held a 34.1% stake in the company as on December-end. Under the amalgamation scheme, shareholders of TRF were to get 17 shares of Tata Steel for every 10 held in the company.

TRF undertakes turnkey projects of material handling for power, port and industrial sectors including steel, cement and fertilizers. The company also manufactures material handling equipment at its facility in Jamshedpur.

“Over the last few quarters, the company has seen improvement in business performance owing to ongoing significant support from Tata Steel in the form of placement of order(s) and infusion of capital coupled with company’s efforts on enhanced debtor collections and, cost and asset optimization,” TRF said in its exchange filing.The company has filed an application with the Kolkata Bench of the National Company Law Tribunal to withdraw the amalgamation scheme, and the NCLT will convene a meeting for shareholders on Thursday, Feb 8.Tata Steel, meanwhile, has completed the amalgamation of five of its businesses – Tata Steel Mining, Tata Steel Long Products, S&T Mining Company, The Tinplate Company of India, and Tata Metaliks. These five companies had a cumulative turnover of ₹19,700 crore in 2022-23 (Apr-Mar).

“The merger of five companies…in record time, presents a unique opportunity for consolidation of the downstream operations. This will enable growth in value added segments by leveraging Tata Steel’s nationwide marketing and sales network,” Tata Steel said.

The merger of Bhubaneswar Power, Angul Energy and The Indian Steel and Wire Products, meanwhile, is expected to the completed by June. “Tata Steel will continue with its simplification journey and leverage relevant opportunities in future,” the company said.

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