ISMT acquires 99.98 per cent stake in SHAB

Indian Seamless Metal Tubes Limited (ISMT), India’s largest integrated specialized seamless tube manufacturer, has raised its stake in Structo Hydraulics A.B. Sweden (SHAB) to 99.98 per cent. After a meeting held on Saturday, the Board of Directors of ISMT approved the Conversion of Loan given to SHAB into equity.

In a press release, the company had informed that the company through its Subsidiary, ISMT Enterprises SA, Luxembourg (IEL) had invested Rs. 48.43 Crore in SHAB, a step down subsidiary of the company, incorporated on August 17, 1999. SHAB is a manufacturer of cold drawn tubes, cylinder tubes and components principally for hydraulic industry which is within the main line of business of the listed entity. The turnover of SHAB in last 3 years i.e. FY2018-19, FY2017-18 and FY2016-17 is Rs. 53.05 crore, Rs. 46.12 crore and Rs. 40.62 crore, respectively.

The company mentioned in the press release that it has received the approval from regulatory authorities for conversion into equity shares of SHAB of an amount of Rs. 33.33 Crore (US$ 5 million) due from SHAB on account of payment towards invocation of guarantee by lenders of SHAB.

It further added that the aforesaid conversion shall be at par value i.e. SEK 5 per share and the shareholding of the company in SHAB, post allotment, shall be around 99.98 per cent (including shares held by IEL) and is in accordance with the extant RBI Regulations.

On Monday, the shares of ISMT opened in BSE at Rs. 4.00 as compared to the previous close of Rs. 4.01. The stock hit an intraday high of Rs. 4.00 and intraday low of 4.00.