Amalgamation of MEL with SAIL becomes effective

The Steel Authority of India (SAIL) said today that amalgamation of Maharashtra Elektrosmelt Ltd (MEL) with the company has been done and MEL stands dissolved.

Both the companies have filed the order of the Central Government, which sanctioned the scheme of amalgamation of MEL with SAIL, with the Registrar of Companies in Mumbai and Delhi last week.

"With the filing of the Order, the amalgamation has been effective and MEL has been dissolved," said a statement filed by SAIL to stock exchanges.

In terms of the scheme, the shareholders of MEL are entitled to receive fully paid-up equity shares of SAIL in the share exchange ratio of 1:1.7 i.e. for every 1.7 fully paid-up equity shares of Rs 10 each held in MEL, every shareholder of MEL shall without any application, act or deed, be entitled to receive one fully paid-up equity share of Rs 10 of SAIL, as consideration for this Scheme.

Since SAIL cannot issue shares to itself, no consideration shall be paid and no shares shall be allotted by SAIL to itself as consideration. Further, the Board of Directors of SAIL will determine a record date, for ascertaining the shareholders of MEL to whom fully paid-up equity shares of SAIL are to be issued and allotted as consideration for this Scheme.

"A board meeting of SAIL is scheduled to be held on July 29, 2011, where a decision on the Record Date would be taken," added the statement.

On the Bombay Stock Exchange, shares of SAIL were trading at Rs 132.90, up 1.18% at IST 1440.