Orient Refractories is in final stages of getting approvals to merge its two unlisted subsidiaries — RHI India and RHI Clasil — with itself for better operational efficiency and simplify holding structure.
All three companies are part of the London Stock Exchange listed RHI Magnesita, a leading global supplier of high-grade refractory products, systems and services.
As part of the merger, Orient Refractories will issue 7,044 equity shares (with face value of ₹1 each) for every 100 equity shares of RHI India (₹10 face value each) and 908 equity shares for every 1,000 equity shares of RHI Clasil (₹10 face value each). Pursuant to the scheme, share base of Orient Refractories will increase from 120.1 million to about 161 million.
The merger through the proposed scheme which was floated in July 2018 is expected to be completed over the next 2 to 3 months from now.
Post the merger, the shareholding of RHI Magnesita, through Dutch US Holding BV and other group companies, in the combined company is likely to be 70 per cent, said Orient Refractories on Tuesday. Furthermore, about 5 per cent of the shareholding will be held by certain individual shareholders of RHI Clasil who are not part of the RHI Magnesita group.
Orient Refractories is the leading manufacturer and supplier of special refractory products, systems and services for the steel industry. The company is 69.6 per cent owned by RHI Magnesita. RHI India, takes care of sales and offers full range of refractories and related services while RHI Clasil, which is 53.7 per cent owned by RHI Magnesita, manufacturer and supplier of mainly Alumina-based refractories for the steel and cement industries. The combined company will have an operating revenue of Rs 1236 crore (on a FY 2018 proforma basis), two production facilities and over 700 employees.
Merger will strengthen operations, significantly expand product offerings and sales platform to access a much larger client base and allow for a pooling of resources and know-how.
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