Uttam Galva Steels Ltd on Friday announced that the board of directors of the company have approved a co-promotion agreement with ArcelorMittal Netherlands BV and the promoters of Uttam Galva, where ArcelorMittal Netherlands BV shall become a co-promoter of the company.
The company in its statement to the Bombay Stock Exchange (BSE) informed that the ArcelorMittal Netherlands will make an open offer, which if undersubscribed, will result in promoters of Uttam Galva surrendering their shares.
?In the event that an open offer, which is to be made by ArcelorMittal Netherlands BV, is under-subscribed then the promoters of the company shall offer ArcelorMittal Netherlands BV to acquire such number of shares from the aforementioned promoters as shall result in their relative shareholdings in the company becoming equal,? the company said in a statement.
Repeated calls made to Ankit Miglani, director (commercial), Uttam Galva Steels Ltd went unanswered. The financial details of the deal were, however, not disclosed. The company said ArcelorMittal would make an open offer and nominate half the non-independent directors on the board.
The total share holding of promoters and promoters shareholding in Uttam Galva as on June 30 th 2009 was 40.71%. Uttam Galva shares rose a whopping 10% on the Bombay Stock Exchange on Friday. The stock ended the day at Rs 113.70, a 52-week high.
Uttam Galva Steels Limited is a major manufacturer-exporter of value added steel products. It is into the business of procuring hot rolled steel (HR) and processing it into cold rolled coils (CR) and further into galvanized products and Colour Coated Coils. In Galvanized coils it specializes in making ultra thin sheets, which could be as low as 0.13mm thickness. Uttam Galva has capacity to produce 750,000 tonne a year of galvanised steel and 1 million tonnes a year of hot and cold rolled coils at its plant in western India.
Uttam Galva had posted a profit after tax of Rs 105.8 crore on a total income of Rs 4,372 crore for FY 2009.