New Delhi: JSW Cement’s board has approved a scheme of arrangement for the merger of its listed subsidiary, Shiva Cement, with the company. The proposed transaction will bring Shiva Cement’s operations under JSW Cement and create a unified cement business platform. JSW Cement currently owns 66.23% of Shiva Cement’s paid-up equity share capital. It also holds the entire optionally convertible cumulative redeemable preference share capital of Shiva Cement, comprising one crore preference shares with an aggregate face value of ₹100 crore. Shiva Cement operates a 1.32 million tonnes per annum clinker manufacturing facility in Sundargarh, Odisha. JSW Cement said integrating the clinker operations with its cement business will reduce its dependence on external clinker procurement and improve supply-chain efficiency. JM Financial is acting as the financial adviser, while Price Waterhouse & Co is the tax and regulatory adviser. PwC Business Consulting Services and BDO Valuation Advisory have acted as independent valuers for determining the share-exchange ratio. The merger will become effective only after the necessary statutory, regulatory and shareholder approvals are received.
Under the proposed share-exchange arrangement, shareholders of Shiva Cement other than JSW Cement will receive five equity shares of JSW Cement for every 41 equity shares of Shiva Cement held. The JSW Cement shares will have a face value of ₹10 each, while Shiva Cement shares have a face value of ₹2 each. The merger is subject to approvals from shareholders, creditors, stock exchanges, SEBI, NCLT and other relevant authorities. JSW Cement Holds 66.23% Stake in Shiva Cement
Following completion of the merger, Shiva Cement’s public shareholders will become direct shareholders of JSW Cement. The company expects the transaction to be completed within 12–14 months, subject to the timely receipt of required regulatory approvals.Merger to Strengthen Backward Integration
The company also expects the merger to combine financial, managerial, technical, distribution and marketing resources. According to JSW Cement, the arrangement is intended to unlock operational and financial synergies, improve funding flexibility, reduce financing costs and simplify the corporate structure.
JSW Cement CEO Nilesh Narwekar said the proposed merger is aimed at creating a more integrated and efficient business while strengthening backward integration and enabling Shiva Cement’s public shareholders to participate directly in the larger listed entity. Advisers for the Transaction
FAQs
1. What has JSW Cement approved?
JSW Cement has approved a scheme to merge its listed subsidiary, Shiva Cement, with the company.
2. What is the share-swap ratio for the merger?
Shiva Cement shareholders will receive 5 JSW Cement shares for every 41 Shiva Cement shares held, excluding shares held by JSW Cement.
3. What stake does JSW Cement hold in Shiva Cement?
JSW Cement holds approximately 66.23% of Shiva Cement’s paid-up equity share capital.
4. Where is Shiva Cement’s manufacturing facility located?
Shiva Cement operates a 1.32 million tonnes per annum clinker manufacturing facility in Sundargarh, Odisha.
5. Why is JSW Cement merging Shiva Cement?
The merger is intended to strengthen backward integration, improve operational efficiency, create synergies and simplify the corporate structure.
6. What approvals are required for the merger?
The merger requires approvals from shareholders, creditors, stock exchanges, SEBI, the National Company Law Tribunal (NCLT) and other relevant authorities.
