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Balasore Alloys to acquire 70% stake Zimbabwe Alloys; stock surges 13%

The stock rallied 13% to Rs 89.90 on BSE on back of heavy volumes

SI Reporter  |  Mumbai 

Chrome Valley, chrome ore, Sukinda Valley, Odisha
Chrome Valley

moved higher by 13% to Rs 89.90 on BSE after the company announced the acquisition of 70% stake in for cash payment of $16.47 million.

“A further payment of $74.26 million to creditors, towards injection of working capital and for a capital expenditure. The payments towards the creditors and members to the company will be paid in a staggered manner”, the company said.

The acquisition will help in creating synergies and in expanding its business base to different parts of the world.

“Consequent upon a scheme of arrangement sanctioned by the High Court of Zimbabwe on 20 December2017 received by us on 8 January 2018, Balasore Alloys, by virtue of the scheme being approved by the requisite margins of members and creditors of (ZAL), shall acquire either by itself and/or through its nominees and affiliates, 70% shares of ZAL, currently under Judicial Management,” said in a statement.

ZAL holds 19,780 hectares of areas in different parts of Zimbabwe, which has proven resources of 72.25 million tonnes of chrome ore. Chrome (Pvt) Ltd, a wholly-owned subsidiary of ZAL has a ferro chrome plant.

The scheme is subject to fulfillment of certain conditions precedent contained in the scheme of arrangement.

In past three trading sessions, the stock of surged 22% from Rs 73.50 on Friday, January 5, 2018.

At 10:28 AM; it was up 12% at Rs 89 against 0.05% rise in the S&P BSE Sensex. The trading volumes on the counter jumped nearly three-fold with 1.4 million shares changed hands on BSE, the exchange data shows.

First Published: Wed, January 10 2018. 10:30 IST