In a letter dated 17 December 2021, Jindal Pipes Limited (“JPL”), one of the largest manufacturers of electric resistance welded, steel pipes and tubes, has reportedly expressed its intent to invest in Indian Seamless Metal Tubes Limited (“ISMT”). JPL has written to the board of ISMT and the stock exchanges where ISMT is listed, that a proposed offer for the acquisition of the controlling stake in ISMT by Kirloskar Ferrous Industries Limited by way of preferential allotment of 15,40,00,000 equity shares of IMST to KFIL, is legally not only tenuous but also averse to the best interests of ISMT’s existing shareholders and creditors, especially banks and financial institutions who have unpaid dues aggregating to Rs. 3412.5 Crores as on 30 September 2020. The letter states that JPL is in the process of structuring a comprehensive and significantly better offer than that of KFIL’s which will be in the best interests of ISMT’s shareholders and creditors alike and has asked the board of ISMT to defer ISMT’s Extraordinary General Meeting scheduled on 22 December 2021 to give effect to the proposed transaction with Kirloskar Ferrous Industries Limited. JPL has also requested the board of IMST to consider its proposal prior to finalizing the proposed transaction with KFIL. The letter dated 15 December 2021 has also been copied by JPL to the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited. An extract from JPL’s 15 December letter is reproduced below:
It is hereby brought to your attention that JPL is in the process of structuring a comprehensive offer for acquiring the majority stake in ISMT Limited, which would not only be significantly better than KIFL’s offer but would also be in the best interests of the shareholders and the creditors/lenders of the Company. Since JPL operates in the same space as ISMT, it is well-positioned to understand the needs and requirements of ISMT’s business. Moreover, JPL is aware of ISMT’s debts and obligations to its lenders and is structuring its proposal to deliver to ISMT the requisite equity infusion in the most efficient manner possible. Among the primary aims and objectives of JPL’s proposed offer is the benefit of all the stakeholders of ISMT. Moreover, the existing shareholders of ISMT will stand to benefit immensely from JPL’s offer which will be better than the Proposed Transaction. Thus, JPL’s offer would be tailor-made and optimized for ISMT’s existing needs.
