Jindal Pipes made a counter-offer to Indian Seamless Metal Tubes shareholders against Kirloskar Ferrous Industries’ ₹477 crore offer.
Without giving details of the offer, sources close to Jindal Pipes said he had expressed interest in acquiring a majority stake in ISMT, which will not only be better than KIFL, but also in the best interest. shareholders and lenders.
In November, Kirloskar Ferrous Industries announced that it would acquire a 51.25% stake in ISMT by investing ₹477 crore in the preferred stock and then making an unsecured loan of ₹194 crore. The deal triggered the mandatory 25% tender offer on the shares.
ISMT was to issue 15.4 crore preferred shares to Kirloskar Ferrous Industries at ₹30.95 per share. On the other hand, Kirloskar will make an open offer at ₹31.84 per share. If the open offer is fully subscribed, Kirloskar Ferrous will have to make a payment of ₹240 crore.
However, in December, Jindal Pipes wrote a letter to the lenders stating that he was aware of ISMT’s debt and obligations to its lenders and was structuring his proposal to infuse the required equity into ISMT in the manner most appropriate. as efficient as possible.
Jindal Pipe’s offer will benefit ISMT lenders and creditors, including operational and financial creditors in addition to workers. That aside, existing ISMT shareholders will also benefit from JPL’s offer which will be better than the proposed transaction with KFIL, he said.
The new offering will be tailored and optimized for ISMT’s existing needs. Since JPL operates in the same space as ISMT, it is well placed to understand the needs of the business, he added.
Avenue Capital-backed Asset Reconstruction Company of India and Edelweiss ARC acquired ISMT loan from banks. The lenders issued a tender for their outstanding loans of ₹3,359 crore shortly after receiving a non-binding offer of ₹670 crore from Kirloskar Ferrous. Rare ARC had submitted an expression of interest to acquire the loan, but did not submit a binding offer.
Since the lenders did not receive any firm offers, they accepted an offer of ₹670 crore from Kirloskar. Now, the Expression of Interest submitted by Jindal Pipes has kickstarted a new twist in the ISMT sale.
January 17, 2022