Tata Steel’s board approved a proposal to file an application before the Bombay High Court,o seeking recall of the scheme of amalgamation between Tata Metaliks (TML) and Tata Metaliks DI Pipes Limited with the steel producer.
The scheme of amalgamation was earlier sanctioned by the Bombay High Court on August 21, 2015.
“…its committee of directors approved the proposal of the company to file appropriate application before the hon’ble high court of Bombay seeking recall of the order dated August 21, 2015 sanctioning the scheme of amalgation between the Tata Metaliks Limited and Tata Metaliks DI Pipes Limited with the company,” the steel maker said in a statement.
The scheme is currently not effective as the petition filed by TML in the Calcutta High Court for approval of the scheme is pending disposal, it said.
Accordingly, TML has been advised to consider withdrawing the scheme with a leave to re-file for a fresh scheme for merger of Tata Metaliks DI Pipes with TML.
“The decision is based on careful consideration of various factors including inordinate delay in obtaining requisite regulatory and statutory approvals along with significant dilution in the intended synergies that were envisaged in April 2013,” said company’s group executive director (Finance & Corporate) Koushik Chatterjee.
Tata Steel will continue to support TML and the latter will continue to operate as a subsidiary of the company, he added.
The scheme was earlier recommended by the committee of directors in April 2013 and approved by the members of the company at the court convened meeting held in May 2014, the statement said.
“In terms of the scheme, the swap ratio for public shareholders was four equity shares of Rs 10 each of Tata Steel for every 29 equity shares of Rs.10 each held in TML,” it said.