Tata Steel Ltd has decided to drop its plan to merge subsidiaries Tata Metaliks Ltd and Tata Metaliks DI Pipes Ltd with itself, as per a stock market disclosure.
The firm’s committee of directors has agreed to apply for a recall of a Bombay High Court order passed on 21 August 2015 sanctioning the scheme of merger of Tata Metaliks and Tata Metaliks DI Pipes with itself.
“Tata Metaliks has been advised to consider withdrawing the scheme with a leave to re-file a fresh scheme of merger of Tata Metaliks and Tata Metaliks DI Pipes,” it said. Tata Metaliks DI Pipes is a wholly-owned subsidiary of Tata Metaliks.
The scheme was earlier recommended by the committee in April 2013 and approved in May 2014. Under the earlier approved scheme, the swap ratio for public shareholders was four shares of Tata Steel for every 29 shares held in Tata Metaliks, the filing said.
The scheme is not effective currently. A petition filed by Tata Metaliks seeking an approval to the scheme from the Calcutta High Court is pending.
“The decision is based on a careful consideration of various factors, including an inordinate delay in obtaining requisite regulatory and statutory approvals along with significant dilution in the intended synergies that were envisaged in April 2013,” said Koushik Chatterjee, group executive director (finance and corporate), Tata Steel.
Tata Metaliks will continue to operate as a subsidiary of Tata Steel.
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