JSW Cement to merge its listed subsidiary Shiva Cement with itself

Board approves 5:41 swap ratio

JSW Cement Ltd, part of Sajjan Jindal-led JSW Group, will merge its listed subsidiary Shiva Cement with itself, a move that will create a "single unified cement platform" and unlock operational, financial and management synergies.

 

The board of JSW Cement has approved a scheme of arrangement, including the amalgamation of Shiva Cement with and into JSW Cement, the company said in a late-night filing on Tuesday.

 

As per the scheme, "JSW Cement will issue 5 equity shares of face value Rs 10 for every 41 equity shares of face value Rs 2 held in Shiva Cement to the shareholders of Shiva Cement." The scheme is subject to receipt of requisite approvals from the stock exchanges, SEBI, the National Company Law Tribunal (NCLT), Odisha Industrial Infrastructure Development Corporation, other statutory and regulatory authorities, including shareholders and creditors.

 

 

"The transaction is expected to be completed within 12-14 months, subject to timely receipt of regulatory approvals," it said.

 

The company said the merger will pool financial, managerial, technical, distribution and marketing resources to drive operational efficiency. It will also allow backward integration through Shiva Cement's clinker facility, reducing dependence on external procurement.

 

On the financial side, JSW Cement cited enhanced funding flexibility, lower financing costs and elimination of inter-company guarantees. The scheme will also cut administrative duplication and compliance requirements, it said.

 

"The proposed merger is a strategic step towards creating a more integrated and efficient business. It will unlock operational and financial synergies, strengthen backward integration, and simplify our corporate structure. Importantly, it will enable Shiva Cement's public shareholders to participate directly in the growth of a larger and more liquid listed entity," JSW Cement CEO Nilesh Narwekar said.

 

JSW Cement had acquired a 37 per cent stake in January 2018 with a subsequent open offer. It currently holds a 66.23 per cent share in Shiva Cement.

 

The company has a cement grinding capacity of 24.10 MTPA with a clinkerisation capacity of 9.74 MTPA.

 

Shares of JSW Cement were trading at Rs 112.85 on BSE, up 0.22 per cent from the previous close.