JSW Ispat Steel, the debt-ridden steel company acquired by Sajjan Jindal last year, is considering shifting its registered office from Kolkata to Mumbai, sources close to the development said.
An official of the company, who did not want to go on record, confirmed that efforts towards shifting the office from Kolkata to Mumbai are on, but did not divulge any further details. The move is significant as both the companies, JSW Steel and Ispat, started their journey from West Bengal. Although JSW Steel has said that it will renew the lease for the Salboni plant, flight of one JSW unit from Kolkata will adversely hit the investment climate in the state.
The company is also likely to discuss the issue at the board meeting scheduled on May 12. Sources said that the company may take the route of postal ballots to get approval of shareholders. Once approved, the issue will be placed in front of the Company Law Board. At present, the promoter holds 69.99% of shares while the institutional holding is 8.67%. While mooted through postal ballots, the company will not have a problem in getting an approval for relocation. In March last year, JSW Steel acquired debt-laden Ispat Industries for R2,157 crore. Later, Jindal promised shareholders of Ispat that the revival of the company will happen in less than 18 months, but the company?s financials continued to be poor.