Team News Riveting
Raipur, September 14
Godawari Power and Ispat Limited (GPIL) today announced to withdraw the Scheme of Arrangement it had reached with another Raipur-based company Jagdamba Power and Alloys Limited (JPAL).
“As a group, Hira Group has a track-record of ensuring that interest of all shareholders (are) protected and while we believe that this transaction is best Interest of GPIL, to avoid any sense of Impropriety on the part of GPIL and promoters of the Company, we have decided to withdraw the scheme of amalgamation,” GPIL said in a regulatory filing. GPIL and JPAL may enter into a separate agreement to acquire/ amalgamate the underlying power assets into GPIL, it added.
The Board of Directors of GPIL in the meeting held today had approved the withdrawal of scheme of arrangement for the demerger of power business undertaking of JPAL and merge into GPIL that was approved by the board on December 24, 2019.
The swap ratio was determined on the basis of fair values as on that date. The Board was expecting to complete the process of demerger in a period of six to eight months but the pandemic played spoilsport and it got delayed. Even the first motion of application had taken over 19 months and could not be completed as on date.
During the period of 20 months, the steel sector has witnessed a robust growth especially after the lockdown was eased while the market dynamics also changed drastically. Hence, the valuations were incomparable and not commercially viable as envisaged at the time of approval of agreement by the Board. It has, therefore, been decided to withdraw the agreement.
However, the existing arrangement of supply of power from JPAL will continue, till an alternate agreement is finalized for acquisition of Power business of JPAL comprising of asset and liabilities of 25 MW power plant.
The GPIL said it had received multiple correspondences from existing investors, investor advisory services and other members of the investment fraternity with regards to the proposed scheme of merger highlighting certain concerns. “While some of the correspondences have been to seek clarifications, others have threatened regulatory/ legal action against GPIL and other advisors associated with the proposed scheme,” the company said.
