Jindal Strips to hive off arms into separate firms

NEW DELHI: In a restructuring mould, OP Jindal group company Jindal Strips Ltd (JSL) is planning to hive off its subsidiaries Jindal Holdings, Jindal Steel and Alloy, and Jindal Stainless (Mauritius) as separate companies. JSL, which has hired global consultants Ernst & Young and law firm Amarchand and Mangaldas and Shroff A Shroff & Co to carry out the restructuring, will consider the demerger issue at its next board meeting likely to be held by end of this month, company sources told PTI here. Sources said the objective of restructuring is to position JSL as a focussed steel manufacturing entity and delineate from all investment activities and create a balanced capital structure for getting better refinancing rated for its high-cost debt. Stating that a large part (Rs 229 crore) of JSL's networth of about Rs 475 crore as on March 31, 2002 was invested in these subsidiaries, sources said this move will enhnace JSL's finanical muscle making it easier for it to get better refinancing deals on a higher networth. Earlier, JSL had also demerged its subsidiary Brahmaputra Capital and Financial Services. JSL is also likely to finalise a buyer for its majority stake in US cold rolling joint venture, Massilon Stainless by the end of this month, sources said. The company's marketing operation in the US would remain unaffected by this sell off as the US market is very important, they added. JSL has been trying to exit Massilon's manufacturing operations since the last one year due to the restrictive trade practices in steel imposed by the US government by which a US company buying steel has to give preference to a company whose majority stake is held by an American. Earlier, the company also explored the option of diluting its majority stake in favour of a strategic partner. As part of its financial restructuring, JSL has also trimmed its high cost debt and has brought down the interest cost up to 9.75 per cent which it is now attempting to bring down to 6.0-7.0 per cent by end of fiscal, they added.

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Jindal Strips to hive off subsidiaries into separate companies

In a restructuring mould, O P Jindal group company, Jindal Strips Ltd is planning to hive off its subsidiaries Jindal Holdings, Jindal steel and Alloy and Jindal Stainless (Mauritius) as separate companies. JSL which has hired global consultants Ernst & Young and law firm Amarchand and Mangaldas and Shroff A Shroff & Co to carry out the restructuring will consider the

demerger issue at its next board meeting likely to be held by end of this month, company sources said on Thursday. Sources said the objective of restructuring is to position JSL as a focussed steel manufacturing entity and delineate from all investment activities and create a balanced capital structure for getting better refinancing rated for its high-cost debt. Stating that a large part (Rs 229 crore or Rs 2.29 billion) of JSL's net worth of about Rs 475 crore (Rs 4.75 billion) as on March 31, 2002 was invested in these subsidiaries, sources said this move will enhance JSL's financial muscle making it easier for it to get better refinancing deals on a higher net worth. Earlier, JSL had also demerged its subsidiary Brahmaputra Capital and Financial Services. JSL is also likely to finalise a buyer for its majority stake in US cold rolling joint venture, Massilon Stainless Inc by the end of this month, sources said.
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Jindal Strips Plans To Hive Off Subsidiaries

In a restructuring mould, OP Jindal group company, Jindal Strips Ltd (JSL) is planning to hive off its subsidiaries Jindal Holdings, Jindal Steel and Alloy and Jindal Stainless (Mauritius) as separate companies. JSL which has hired global consultants Ernst & Young and law firm Amarchand and Mangaldas and Shroff and Shroff & Co to carry out the restructuring will consider the demerger issue at its next board meeting likely to be held by end of this month, company sources told PTI here. Sources said the objective of restructuring is to position JSL as a focussed steel manufacturing entity and delineate from all investment activities and create a balanced capital structure for getting better refinancing rated for its high-cost debt. Stating that a large part (Rs 229 crore) of JSLs networth of about Rs 475 crore as on March 31, 2002 was invested in these subsidiaries, sources said this move will enhance JSLs financial muscle making it easier for it to get better refinancing deals on a higher networth. Earlier, JSL had also demerged its subsidiary Brahmaputra capital and financial services. JSL is also likely to finalise a buyer for its majority stake in US cold rolling joint venture, Massilon Stainless Inc by the end of this month, sources said. The companys marketing operation in the US would remain unaffected by this sell off as the US market is very important, they added.

JSL has been trying to exit Massilons manufacturing operations since the last one year due to the restrictive trade practices in steel imposed by the US government by which a US company buying steel has to give preference to a company whose majority stake is held by an American. (PTI) >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

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Demerged TCS to stick with high payouts

Snigdha Sengupta & K Yatish Rajawat, TNN Dec 25, 2002, 04.41am IST

MUMBAI: Tata Consultancy Services (TCS), after its hive-off as a separate company, will continue to follow a high dividend policy to ensure that the bulk of the company's profits remain with the parent company, Tata Sons, according to company sources. Tata Sons, the holding company of the Tata group, will demerge its software services division into its subsidiary Orchid Print India, which will subsequently be renamed Tata Consultancy Services. The company has sought the Bombay High Court's approval for the same. This is seen as the first step towards a final listing of the Rs 4,000 crore revenue generating division, TCS. Tata Sons' top officials, when contacted by ET, declined to comment on the issue, but company spokesperson confirmed that an application has been moved in the Bombay HC late last week. Company sources said that the Tata Sons board is slated to take a formal decision on the high-dividend policy shortly. Earlier this year, following a finance ministry guideline, Tata Sons secured an exemption from the income tax authorities to continue enjoying concessions under Section 10A and 10B of the Income Tax Act if it demerges TCS into another company. Though the '02 Union budget had cleared such a thing, a specific notification was to be issued by the Central Board of Direct Taxation on the same. The finance ministry issued the notification later in the year which has now helped the company to demerge its division into a subsidiary without losing the tax benefit. Under the earlier CBDT provisions, the tax holiday extended to export-oriented units under the concerned sections would be withdrawn if the 'ownership' of the undertaking changed or transferred. This was amended in the union budget to extend the tax holiday if the 'beneficial ownership' remained unchanged after the transfer. Orchid Print India, which is proposed to be renamed as Tata Consultancy, was created in '01 when Tata Sons acquired a 96% stake in RR Donelley India at a price of Rs 54.6 crore. RR Donnelley India was the investment vehicle through which RR Donnelley held its stake in Tata Donnelley. Following the acquisition, Tata Sons renamed the company Orchid Print India. TCS is now the largest software services exporter in the country with an employee base of a little over 21,000. About 4,000 fresh recruitment are slated to take place during the next financial year. Tata Sons plans to raise Rs 3,000-Rs 4,000 crore by selling a 10% stake in the domestic public market. The issue is targeted to hit the market in the first half of '03, though market conditions will determine the

eventual timing. During fiscal '01-'02, TCS earned profits in the region of Rs 1,300 crore and is aiming to be among the top ten consulting firms globally by 2010.

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