Tata Steel BSL Delisted: Shareholders to Receive Tata Steel Shares Instead
Tata Steel has received approval for the composite Scheme of Amalgamation of Bamnipal Steel Limited and Tata Steel BSL (into and) with Tata Steel Ltd., by the National Company Law Tribunal.
The scheme of amalgamation was approved by the board of Tata Steel on April 25, 2019. Post regulatory approvals, the company announced that Tata Steel BSL (listed entity) will be amalgamated with Tata Steel at the ratio of 15:1. This means, for every 15 shares of Tata Steel BSL, the investor will receive 1 share of Tata Steel.
Note that, Tata Steel BSL shares will be suspended from trading from November 15. The last trading day for the company is November 12.
Scheme of Amalgamation
Tata Steel Limited will issue and allot 1 fully paid-up equity share of face value Rs 10/- each of Tata Steel, for every 15 equity shares of the face value of Rs 2/- each held in Tata Steel BSL.
The record date has been kept as November 16, 2021, for the purpose of determining the shareholders of Tata Steel BSL.
Those shareholders who hold shares in Tata Steel BSL as of the record date (November 16) will be considered for receiving shares in Tata Steel Limited.
For example: if you hold 35 shares of Tata Steel BSL, you will receive 2 shares of Tata Steel. This is in line with the 15:1 (1 share of Tata Steel for every 15 shares of Tata Steel BSL) amalgamation ratio. You will be given cash for the leftover 5 shares of Tata Steel BSL.
Purpose of Amalgamation
After the completion of the proposed amalgamation, Bamnipal Steel no longer required to exist as a separate legal entity. It was incorporated for the purpose of completing the acquisition of Tata Steel BSL. With the completion of the amalgamation, it ceases.
The deal is expected to simplify the group structure of Tata Steel and also reduce the multiplicity of legal and regulatory compliances. Further, Tata Steel BSL and Tata Steel are both engaged in the business of manufacture and sale of steel and steel products.
The amalgamation, according to the company, will ensure focused management in the combined entity. This is expected to result in operational efficiency, reduction in costs and maximizing value for the shareholders.
Bamnipal Steel
Bamnipal Steel Limited is currently a wholly owned subsidiary of Tata Steel. It was
incorporated for the purpose of completing the acquisition of Tata Steel BSL.
Tata Steel, through Bamnipal Steel, acquired 72.65% of the equity share capital of Tata Steel BSL. The rest of the share capital (27.35%) in Tata Steel BSL is owned by the public.
Tata Steel BSL
Tata Steel BSL (formerly known as Bhushan Steel Limited) is a public limited company that was incorporated on January 7, 1983. The company was under insolvency proceedings in the past few years.
Tata Steel had won the bid to acquire debt-laden Bhushan Steel Ltd (BSL) in insolvency proceedings in 2018. Bhushan Steel was later renamed as Tata Steel BSL.
The company is engaged in the business of manufacturing steel and offers products such as hot rolled, cold rolled and coated steel, cold rolled full hard, galvanized coils and sheets, etc.
Tata Steel BSL is a subsidiary of Bamnipal Steel, which is a wholly owned subsidiary of Tata Steel.
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