JISCO:SEC:SEs:139

February 4, 2005

National Stock Exchange of India Ltd.
Exchange Plaza
Plot No. C/1, G Block
Bandra - Kurla Complex
Bandra (E)
Mumbai - 400 051
Phone No. 2659 8100-8114
Fax No.: 2659 8237-38
Ref : Company Symbol : JINDALIRON

Dear Sir,

Further to our Letter No.JISCO: SEC:SEs:134 dated January 28, 2005 and in compliance with Clause 16 and other applicable provisions of the Listing Agreement, we hereby inform you that Friday, the 25th day of February, 2005 has been fixed as the record date for the purpose of drawing up the list of shareholders of the Company (JISCO) to whom shares in Jindal South West Holdings Limited(JSWHL) and Jindal Vijayanagar Steel Limited (JVSL) are to be issued and allotted pursuant to the Scheme of Arrangement and Amalgamation between the Company, Jindal Vijayanagar Steel Limited & Jindal South West Holdings Limited ("the Scheme").

We enclose herewith the following:

1. The copies of the Orders of the Hon'ble Bombay & Karnataka High Courts sanctioning the Scheme dated 3rd September 2004 and 20th January 2005 respectively.

2. Copy of Form 21 alongwith proof of filing with the Registrar of Companies, Maharashtra, Mumbai & Registrar of Companies, Karnataka, Bangalore. 

In terms of the sanctioned Scheme of Arrangement, the equity shareholders of the company on the Record Date will be issued: 

a) One equity share of JSWHL of the face value of Rs.10/- each for every four equity shares held by them in JISCO as laid out under clause 9 of Part 2 of the scheme.



b) One Equity share of JVSL of the face value of Rs.10/- each for every one equity share of Rs.10 each held by them in JISCO as envisaged under clause 28 of Part 4 of the Scheme, after the reorganisation of the Capital of JVSL as per the Scheme.

The Equity shares to be electronically credited as aforesaid to holders of Shares in Demat mode will be under a New ISIN Number for which JVSL will be approaching the concerned depositories.

The salient features of the Scheme as intimated to you vide our Letter No.JISCO:SEC:VSG:390 dated November 13, 2003, are once again reproduced below:

1. Demerger of the Investment Division (including equity holding in Jindal Vijayanagar Steel Limited) of Jindal Iron & Steel Company Limited (‘JISCO’) into Jindal South West Holdings Limited (‘JSWHL’): 

1.1 In consideration, the Equity Shares will be issued to the Shareholders of JISCO in the ratio of 1(one) equity share of JSWHL for every 4(four) equity shares held by them in JISCO.

1.2 No Liabilities will be transferred alongwith the Investment Division

1.3 The Investment Division of JISCO would be subject to subsisting charges and pledges, if any.

1.4 The shares of JSWHL will be listed on the Stock Exchange, Mumbai, the National Stock Exchange and Delhi Stock Exchange

1.5 The Appointed Date for the demerger is April 1, 2003

2. Reorganisation of the Share Capital of Jindal Vijayanagar Steel Limited (‘JVSL’). The steps involved in the re-organisation of the capital are summarised below:

2.1 As contemplated in the Corporate Debt Restructuring package (‘CDR’) approved by the lenders of JVSL, the Scheme provides for the conversion of 4(four) equity shares out of every 10(ten) equity shares held by the equity shareholders of JVSL into 4(four) 0.01% Cumulative Redeemable Preference Shares (‘CRPS’) of Rs. 10 each. 

The 0.01% CRPS shall be converted into equity shares of Rs. 10 each in the ratio of 1 (one) equity share for every 4 (four) CRPS held by the shareholders resulting in allotment of 12,91,01,550 equity shares.

2.2 JVSL shall allot 1(one) warrant in respect of every 7(seven) equity shares held by its shareholders other than on shares allotted as in 2.1 and 2.3. The holder of the warrant will have a right to apply and be allotted 1(one) equity share of JVSL for each warrant held by the shareholder. The warrant holder will be entitled to apply for the equity share on or before 1st April, 2006 as may be decided by the Board of Directors and will be required to pay Rs. 10 per equity share (at par).

2.3 As contemplated in the CDR, Rs. 4,56,88,22,570, of debt shall be converted into 45,68,82,257 equity shares of Rs. 10 each of JVSL. These shares will not be liable to conversion as in 2.1. 

2.4 After giving effect to the aforesaid re-organisation of capital of JVSL, the paid up value of the entire reorganised capital will be reduced by Rs. 9.375 per share. Thereafter the equity shares would be consolidated into fully paid up shares of Rs. 10 each resulting in the reduction in the number of equity shares.

2.5 Pursuant to the aforesaid reduction, the warrant entitlement as in 2.2 above will also have to be adjusted proportionately. Therefore, effectively, JVSL shall allot 1(one) warrant in respect of every 112 equity shares held by its shareholders. The holder of the warrant will have a right to apply and be allotted 1(one) equity share of JVSL for each warrant held by the shareholder. The warrant holder will be entitled to apply for the equity share on or before 1st April, 2006 as may be decided by the Board of Directors. However, each warrant holder will be required to pay Rs. 160 per equity share (including premium of Rs. 150 per share). If all warrants are exercised 1,15,26,924 equity shares shall be issued for an aggregate subscription of Rs. 184.42 crores. 

3. The amalgamation of the Company (excluding the Investment Division) into JVSL:

3.1 The share exchange ratio for the amalgamation is 16 (Sixteen) equity shares of Rs. 10 each of JVSL for 1 (One) equity share of Rs. 10 each held by the shareholders of JISCO. 

3.2 However, since the Scheme envisages reduction of capital of JVSL (as in 2.4), the exchange ratio shall be adjusted to one equity share of Rs. 10 each of JVSL for one equity share of Rs. 10 each held by the shareholders of JISCO.

3.3 The Appointed Date for the Scheme is April 1, 2003.

3.4 On the Scheme being effective, the name of JVSL shall be changed to that of the company i.e. ‘Jindal Iron & Steel Company Limited’


The Illustrative Chart of Share entitlements as per the Scheme is given below:

JISCO Shareholder for every 100 Shares held on Record Date JVSL Shareholder for every 100 Shares held on Record Date JVSL Shareholder for every 112 Shares held on Record Date
No. of shares inJVSL (After reorganisation of JVSL's Equity Capital) No of shares in JSWHL No. of shares in JVSL (After reorganisation of JVSL's Equity Capital) One Share warrant with right to apply and be allotted one Equity Share of Rs.10/-each of JVSL upon payment of Rs.160 per equity Share (Rs.10 face value+Rs.150 share premium).The warrant holder will be entitled to apply for the equity share on or before 1st April, 2006 as may be decided by the Board of Directors. Warrants are tradable and will be Listed.
100 25 4.375 

A Brief Background of the Companies is also given below:

1. Jindal Iron and Steel Company Limited (JISCO):

Jindal Iron & Steel Company Limited (JISCO) was originally incorporated as Piramal Steel Limited on June 2, 1972. Jindals, having wide experience in steel Industry, acquired controlling stake in the Company in 1982 whereupon the name of the company was changed to its present name. 

JISCO has expanded rapidly and has emerged as a major steel producer in the private sector with in-house facility for the manufacture of Hot Rolled plates, Cold Rolled coils and sheets and Galvanised products. JISCO has manufacturing facilities at Tarapur and Vasind in Maharashtra. The company procures HR Coils, which are converted into CR Coils/Sheets, which are then further converted into Galvanised plain sheets/coils and galvanised corrugated sheets which are a value added product in the Steel Industry and is mainly used in construction, white goods and the Auto sectors.

Exports accounted for 78% of the Company's Net Sales in FY 2003-04. JISCO is the largest exporter of Galvanised products from India, accounting for about 30% of the country’s total exports in FY 2003-04 and has market presence in 45 countries and 5 continents. The Company has achieved a Gross Sales of Rs.1368.19 Crores for the Half Year ended 30.09.2004. The Company's Equity Shares are listed on BSE, NSE and Delhi Stock Exchange Association Limited. 

2. Jindal Vijayanagar Steel Ltd:

Jindal Vijayanagar Steel Limited (JVSL) was incorporated on March 15, 1994. It has been promoted by JISCO and its associated companies and Karnataka State Industrial Investment Development Corporation Limited (KSIIDC). Spread over 3500 acres of land JVSL's plant located at Toranagallu, Bellary District, has a production capacity of 2.5 MTPA of HR coils (recently expanded from 1.6MTPA to 2.5 MTPA) with an investment of around Rs. 6,500 Cr. The plant, which uses COREX technology from Voest – Alpine, Austria is the first plant to use oxygen-based Iron and Steel making in the country with continuous casting and hot strip mill. JVSL manufactures high quality Hot Rolled Coils, Plates and Sheets and is the only flat Steel Producer in South India. JVSL was set-up as a backward integration facility for production of hot rolled coils for JISCO. The complete steel making and hot rolling facilities have stabilised and the company has achieved a Gross Sales of Rs.2272.27 Crores for the Half Year ended 30.09.2004.

Upon consolidation of the results of JISCO & JVSL, the Merged Entity has reported a Gross turnover of Rs.5941.04 Crores and Net profit of Rs.465.97 Crores for the Nine months ended 31.12.2004.

3. Jindal South West Holdings Limited:

JSWHL incorporated on 12th July, 2001 is an unlisted Public Limited Company in the business of Investments & Trading in shares, Debentures, Stocks etc. and providing Management Consultancy Services. Steps are being taken to list the Company's Equity Shares with BSE, NSE and Delhi Stock Exchanges. 

We request you to suitably notify your Members and all concerned.

Thanking You,

Yours faithfully,
for Jindal Iron & Steel Co Ltd.

Lancy Varghese
Company Secretary. 

 


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Jindal Iron & Steel Company Limited