Kirloskar Ferrous Industries Ltd, one of India’s largest castings and pig iron manufacturers, has agreed to acquire a majority stake in Indian Seamless Metal Tubes (ISMT) Limited, the largest integrated specialized seamless tube manufacturer in India.
KFIL will subscribe to shares for an aggregate consideration of Rs. 476.63 Crores at a per share price of Rs. 30.95 by the way of preferential allotment. These shares will represent 51.25 percent of the resultant share capital of the Target Company. Further, in accordance with the provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, the Company has also commenced an open offer for acquiring up to 25.05 percent of the resultant voting capital of the Target Company, the statement said.
The board of directors of the company have also approved to seek approval of the Members of the company for increase in the permitted borrowing limits.
Commenting on the acquisition, R.V.Gumaste, Managing Director, KFIL, said “We are excited to announce this acquisition, which is subject to necessary approvals, as we enter into the seamless pipes market. This acquisition is further widening our portfolio and diversifying the current product portfolio. We are looking forward to leveraging our existing customer base and adding the customers that ISMT brings along. We believe this acquisition brings us an opportunity to integrate iron ore to seamless tubes at a consolidated level. Ongoing projects along with this acquisition will help us bring cost efficiencies in the value chain. We believe these synergies will put us on an accelerated growth path in coming years.”
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