1. |
Name of the target entity, details in brief such as size, turnover etc. |
Tata Sponge Iron Limited ('TSIL') TSIL is one of India's largest merchant sponge iron manufacturers. TSIL is engaged in the manufacture and sale of sponge iron using the [TDR] technology. TSIL also engages in the generation and sale of power by utilizing the waste heat emanating from the sponge iron production process. TSIL has taken over Usha Martin - Steel Business unit on April 9, 2019, which is an Integrated Steel Plant to manufacture alloyed speciality steel in long products segments like Wire Rods and Bars. The turnover of TSIL for FY 2018-19 is ₹992.05 crore. |
2. |
Whether the acquisition would fall within related party transaction(s) and whether the promoter/ promoter group/ group companies have any interest in the entity being acquired? If yes, nature of interest and details thereof and whether the same is done at "arm's length" |
This is not a related party transaction as it is a subscription to equity shares of TSIL pursuant to TSIL's Rights Issue and does not involve any sale/purchase of shares. TSIL, is a subsidiary of the Company and has allotted the Rights Equity Shares to the Company pursuant to the Rights Issue. The allotment is in compliance with the applicable laws. |
4. |
Objects and effects of acquisition (including but not limited to, disclosure of reasons for acquisition of target entity, if its business is outside the main line of business of the listed entity) |
TSIL announced the Rights Issue with the primary objective of repaying or pre-paying or redeeming the debt of TSIL and for general corporate purposes. The Company, being a promoter company of TSIL supports this objective and accordingly subscribed to the Rights Issue. |
6. |
Indicative time period for completion of the acquisition |
The acquisition has been completed on July 24, 2019 when the Company acquired the Rights Equity Shares at an issue price of ₹500/- per Rights Equity Share (including a premium of ₹490/- per Rights Equity Share) aggregating to ₹1,292.20 crore. |
8. |
Cost of acquisition or the price at which the shares are acquired |
The Rights Equity Shares have been acquired at an issue price of ₹500 per Rights Equity Share (including a premium of ₹490/- per Rights Equity Share) aggregating to ₹1,292.20 crore |
9. |
Percentage of shareholding / control acquired and / or number of shares acquired |
|
Number & % of share holding before acquisition |
Number & % of share holding after acquisition |
Equity Shares of face value of ₹10/- each |
83,93,554 equity shares of TSIL representing 54.50% of the share capital of TSIL |
3,42,37,521 equity shares of TSIL representing 75.91% of the share capital of TSIL* |
*As per the relaxation granted by the Securities and Exchange Board of India vide its letter dated May 24, 2019. |
10. |
Brief background about the entity acquired in terms of products/line of business acquired, date of incorporation, history of last 3 years turnover, country in which the acquired entity has presence and any other significant information (in brief) |
TSIL, incorporated on July 31, 1982, is one of India's largest merchant sponge iron manufacturers. It also manufactures steel products and is engaged in the sale of power generated from the waste heat emanating from sponge iron production process. TSIL with its manufacturing plant in Joda, Odisha, is located near India's richest iron ore reserves and is well connected with roadways and railways, enabling it to seamlessly cater to different stakeholders. Through its sponge iron business, TSIL primarily caters to the metallic requirements of steel producers in select geographies. With the recent acquisition of the steel business of Usha Martin Limited on April 9, 2019, TSIL has also entered the domain of steel manufacturing with focus on long products, including special and alloy steels. As of March 31, 2019, TSIL's production capacity is as follows: Sponge iron - 3,90,000 Tonnes per annum Power generation - 26 MW Crude Steel - 1 Million Tonne per annum TSIL's turnover for last three consecutive years are as below: · FY 2018-19 Revenue: ₹992.05 crore · FY 2017-18 Revenue: ₹816.65 crore · FY 2016-17 Revenue: ₹615.16 crore |