Kirloskar Ferrous Industries Limited, a leading castings and pig iron manufacturer, announced the scheme of arrangement and merger to amalgamate and consolidate the entire undertaking business and operations of Indian Seamless Metal Tubes Limited (ISMT).
The appointed date of the proposed scheme is April 1, 2023 and all the assets and property of ISMT immediately before the merger date shall stand transferred to KFIL.
All the liabilities of the ISMT immediately before the merger appointed date shall stand transferred to KFIL. Shareholders holding not less than three-fourths in the value of the shares in ISMT shall become shareholders of KFIL by virtue of the merger (other than shares already held therein by KFIL).
Commenting on the merger, Atul Kirloskar, Chairman, KFIL, said, “We acquired ISMT in March 2022, to enter into the seamless tubes market. For KFIL this was a step towards forward integration and product diversification. On the other hand for ISMT this was a step towards backward integration”.
He added, “ This acquisition has brought us an opportunity to integrate iron ore to seamless tubes. Now taking a step further, we are proposing to integrate the entire business under the umbrella of Kirloskar Ferrous Industries Ltd. to reap the synergies between the two businesses.”
Commenting on the rationale of this merger, R.V.Gumaste, Managing Director, KFIL, said, “As we complete two-quarters of the full operations of ISMT post-acquisition, our team has ensured smooth operations and is confident to move ahead in line with our expectations. We believe, the merger will result in a financially robust entity with a broader customer base covering the entire value chain. This will also help us improve operational efficiencies through standardization and simplification of business processes.”
Founded in 1991, Kirloskar Ferrous Industries Limited is one of India’s largest castings and pig iron manufacturers. The company caters to various industry sectors, such as tractors, automobiles and diesel engines.
ISMT is the largest integrated specialized seamless tube manufacturer in India. It is one of the most diversified manufacturers of specialized seamless tubes in the world, producing tubes in the range of 6 to 273 mm diameter.