The company, in an exchange filing on Wednesday, said its board of directors approved the demerger of Maharashtra Seamless into MSL Seamless Tubes Ltd. and United Seamless Ltd.
The same is subject to the requisite approvals and sanctions of the jurisdictional bench of National Company Law Tribunal (NCLT) and also subject to the approval of the shareholders and/or creditors of Maharashtra Seamless, the Central government or such other competent authority or intermediaries or agencies, as may be directed by the NCLT, the company said.
The demerged undertaking 1, MSL Seamless Tubes Ltd., will comprise the seamless pipe manufacturing business of located at Mangaon, Maharashtra (1.25 lakh MTPA), and the captive solar power plant at Beed, Maharashtra (10 MW).
The demerged undertaking 2 (United Seamless Ltd.) will comprise the seamless pipe manufacturing facility at Narketpally, Telangana, with a capacity of 2 lakh MTPA, solar power plants at Khetusar of 20 MW and Pokhran of 5 MW in Rajasthan.
Both demerged undertakings will also comprise their specified assets and liabilities respectively.
Post the demerger, promoter entities are indicated to hold 1.88 crore shares or 70.3% equity in the each of the company while public shareholders are indicated to hold 79.59 lakh shares or 29.69% stake in each firm.
Existing shareholders of Maharashtra Seamless will receive one equity share each of both demerged entities for every five shares of Maharashtra Seamless they own as on the record date, which is yet to be determined.
At the end of the June quarter, nearly 80,000 small retail shareholders, or those with authorized share capital of up to ₹2 lakh, had a 10% stake in the company. The September shareholding pattern is yet to be disclosed.
Shares of Maharashtra Seamless ended 1.1% higher on Wednesday at ₹693. The stock has risen 25% so far this year.