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JSW Ispat - JSW Steel four years of engagement period before marriage: win-win for all stakeholders
M & A Critique
|August 2022
The acquisition of JSW by the consortium Steel Limited & AION Investments Private Il Limited of JSW Ispat Special Products Limited (formerly known as Monnet Ispat & Energy Limited) marked foray as one of the first acquisitions through the Corporate Insolvency Resolution Process (CIRP) under the Insolvency & Bankruptcy Code, 2016 (IBC).
Interestingly, the acquisition was through a Special Purpose Vehicle between a consortium of financial & the strategic investor (JSW Steel Limited). The merger of JSW Ispat Special Products Limited with the strategic investor was inevitable however, the journey from the acquisition to the merger was planned to facilitate promised returns to the financial investor as well as to have a minimum dilution of promoters holding post-merger. In this article, we have tried to study the various aspects from acquisition to announced merger.
JSW Steel Limited ("JSW Steel" or Transferee Company") is the flagship company of the diversified conglomerate JSW Group. JSW Steel is a leading integrated steel manufacturer in India with a current consolidated domestic crude steel capacity of 27 million tonnes per annum (MTPA). The equity shares of the company are listed on nationwide bourses.
JSW Ispat Special Products Limited ("JSW Ispat" or "Transferor Company 2") is engaged in manufacturing and marketing sponge iron, pellets, steel and ferro alloys. It has an integrated steel plant at Raigarh, which is currently operating at a capacity of ~0.95 MTPA which is in the process of expansion to 1.5 MTPA. It also has another unit for steel production at Raipur with 0.25 MTPA capacity. The equity shares of the company are listed on nationwide bourses.
Creixent Special Steels Limited ("Creixent" or "Transferor Company 1") a special purpose joint venture formed by JSW Steel & AION Investments Private II Ltd. (AION) to acquire controlling stake in JSW Ispat. As on date, Creixent directly holds 48.12% equity stake (effective stake is 56.89%) in JSW Ispat. The nonconvertible debentures of Creixent are listed on the wholesale debt market segment of BSE Limited.
Esta historia es de la edición August 2022 de M & A Critique.
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