ArcelorMittal Netherlands BV will step in as co-promoter of Mumbai-based Uttam Galva Steels. The company was promoted by Mr Rajinder Miglani in 1985.ArcelorMittal, the world’s largest steelmaker present in over 60 countries, will come out with an open offer.
In a communication to the stock exchanges, after close of market hours, Uttam Galva said its board on Friday approved the co-promotion agreement to accommodate ArcelorMittal. Its shares were up 10 per cent on the NSE to close at Rs 113.95.
Of the total shareholdings of 40.71 per cent held by promoters and the promoter group, 67.19 per cent has been pledged. The company’s equity capital is Rs 113.97 crore.
In the event of an open offer remaining under-subscribed, the promoters would offer ArcelorMittal such number of shares so as to ensure that the relative shareholding becomes equal.
Uttam Galva Steels is a manufacturer-exporter of value-added steel products.
For the year-ended March 31, 2009, Uttam Galva reported a net profit of Rs 100 crore with 39 per cent rise in net sales at Rs 4,372 crore against Rs 3,156 crore logged for the previous year. For the quarter ended June 30, 2009, net sales were Rs 1,073 crore and net profit Rs 35 crore.
Other provisions to the deal include the right for each of the co-promoters to nominate one-half of the non-independent directors of the company, besides veto rights to both the co-promoters on a list of matters, subject to them maintaining certain prescribed thresholds of shareholding.
Uttam Galva Steels said the agreement contemplated amendments to the Articles of Association to incorporate the rights of the parties.
Source: thehindubusinessline.com
