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Commenting on the development, Suketu V Shah, deputy general manager of Mukand Ltd, told ET: “We want to focus more on each company. Since companies are different, they need to be realigned. This will allow us to give each business the importance it deserves. By the way, Mukand Alloy Steels is 99% owned by Mukand Ltd.
Following the transfer of special and alloy steels, Mukand’s engineering and stainless steel activities will remain within the parent company. Following the company’s announcement in a Bombay Stock Exchange notice on Monday, Mukand’s script gained 12% in intraday trading, before closing at Rs 51.50, 1.48% higher than its previous close .
“The deal is subject to debt deduction and a net adjustment to working conditions. The transaction will be effective upon approval, including approval from the lenders,†Mukand said in his statement to the ESB. Mukand Alloy Steels, which has an annual installed capacity of 3.7 tonnes lakh in Hospet, Karnataka, accounts for the bulk of Mukand’s steel activities.
Previously, the board of directors of Mukand Ltd had approved a proposal to transfer its special and alloy steels business to a subsidiary in December 2014.
“The above restructuring proposal is intended to facilitate the possible introduction of a strategic partner,” Mukand said in his statement to the stock exchanges following the board’s decision last December. Following this, the shareholders of the company approved the sale by mail ballot on February 18, 2015, paving the way for the signing of a business transfer agreement for the transfer of the business to Mukand Alloy Steels.
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