The National Company Law Tribunal, Mumbai Bench (NCLT) has sanctioned the scheme of amalgamation of RHI Clasil Private Limited (RHI Clasil), RHI India Private Limited (RHI India) and Orient Refractories Limited (ORL) through an order dated 5 May, 2021.
The copy of the order issued by the Hon’ble NCLT was made available to ORL through the NCLT website on 18 May, 2021. Subsequent to this, the two subsidiary companies of RHI Magnesita in India – RHI Clasil and RHI India shall stand merged into the public listed entity ORL.
Commenting on the development, Parmod Sagar, MD & CEO of ORL and Regional President of RHI Magnesita said, “The integration of the three separate legal entities would now enable us to synergize, simplify and consolidate our strength in India to serve our ever growing customers better. RHI Magnesita is going to provide customers with one single refractory solutions platform offering the industry’s most comprehensive product and solutions portfolio as an end to end solution provider.”
The Board of Directors would decide on the further course of action related to the amalgamation, including fixing of the effective date of the amalgamation, in its next meeting.
“The integration also results in improved allocation of capital and optimization of cash flows contributing to the overall growth prospects of the new integrated company, creation of a larger asset base and facilitation of access to better financial resources; and enhancement of shareholder value pursuant to economies of scale and business efficiencies.”, added Sagar.
ORL had approved the proposed scheme in its board meeting on 31 July, 2018 and the proposed scheme was also approved by the shareholders (including the public shareholders) and creditors of ORL on 17 May, 2019 with overwhelming majority.
Subsequently, all necessary regulatory and statutory approvals were duly obtained, and the scheme was filed jointly by the three companies with the NCLT at Mumbai for its approval. However, in an order issued on 2 March, 2020, the NCLT rejected the proposed scheme.
After carefully assessing the details of the order issued by the NCLT, ORL decided to file an appeal before the National Company Law Appellate Tribunal (NCLAT). The NCLAT by an order dated 19 January, 2021, set aside the order passed by the NCLT rejecting the scheme and directed the NCLT to approve the scheme. Subsequently, NCLT, Mumbai Bench, in its order dated 5 May, 2021 approved the scheme.
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