JSW Cement Ltd, a cement manufacturer, and its listed subsidiary Shiva Cement Ltd have approved a scheme of arrangement for the amalgamation of Shiva Cement with JSW Cement.
The consolidation is aimed at creating a single unified cement platform and unlocking operational, financial and management synergies. It is also expected to right-size the financial statements and simplify the corporate structure.
Share-swap ratio fixed
Under the proposed arrangement, JSW Cement will issue five equity shares of ₹10 each for every 41 equity shares of ₹2 each held in Shiva Cement.
JSW Cement Ltd holds 66.23% of the paid-up equity share capital of Shiva Cement. The transaction is expected to be completed within 12-14 months.
Merger to strengthen integration
“The proposed merger is a strategic step towards creating a more integrated and efficient business. It will unlock operational and financial synergies, strengthen backward integration, and simplify our corporate structure,” JSW Cement, CEO, Nilesh Narwekar, said.
“Importantly, it will enable Shiva Cement’s public shareholders to participate directly in the growth of a larger and more liquid listed entity,” he said.
No change in shareholding pattern
JSW Cement said there would be no consideration involved in the proposed reorganisation of reserves of Shiva Cement. Consequently, there will be no benefit to any promoter, promoter group or group companies of the transferor company.
The merger will also have no impact on the shareholding pattern, according to the companies.
Both companies operate in cement
JSW Cement manufactures and sells cement, ground granulated blast furnace slag and clinker, besides trading in allied products.
Shiva Cement manufactures and sells cement and clinker and trades in allied products. The merger is intended to bring the two businesses under a single corporate platform.