Godawari Power & Ispat Limited (the "Company" or "GPIL"), a dominant player in iron & steel industry, is pleased to announce that it has entered into definitive agreement to acquire 51% Stake in Jammu Pigments Limited ("JPL") at a post money valuation Rs. 500 Crores approx. As a part of this deal, GPIL will infuse Rs. 175 crores in JPL for repayment of certain unsecured debt and growth capital and will acquire shares worth Rs. 79.52 Crores from the existing promoters of JPL in two tranches.
Jammu Pigments Limited is engaged in Recycling of Non - Ferrous Metals Business with operations covering recycling of Lead Acid Batteries and other Secondary Lead waste. The company and its subsidiaries are also equipped to process complex mixtures of Hazardous Industrial waste of non-ferrous metals to recover Lead, Tin, Zinc, Copper, Cadmium etc. JPL's advanced technical expertise enables the efficient extraction of trace metals from waste materials, ensuring highly cost-effective operations. JPL & its subsidiaries has manufacturing units located at Kathua district, Jammu & Kashmir and Kota, Rajasthan. The subsidiaries are 100% owned by JPL either directly or indirectly through other subsidiaries.
The JPL group has bank borrowings of Rs 339 Crores (sanctioned limits) as on 31st Oct 2024, which includes fund-based loans of Rs 302 Crores and non-fund-based limits of Rs 37 Crores, which will continue following the change in management control.
The stake purchase will be two-tranche process and will be completed in the following manner:
Tranche 1- Purchase of 49% Stake:
GPIL will infuse Rs 175.00 Crores in JPL for issue of Compulsory convertible Preference Shares which will get converted into Equity Shares upon completion of 6 months from the date of allotment and GPIL will purchase additional shares worth Rs. 79.52 Crores from promoters of JPL.
Tranche 2 - Purchase of additional 2% Stake
GPIL will acquire additional 2% stake (equivalent to Rs. 10 Crores approx..).
The transaction is subject to satisfaction of Conditions Precedent. The transaction is expected to be fully consummated by 31st March 2024. Post the completion of the transaction, JPL will be subsidiary of GPIL and will be managed jointly by its existing promoter and GPIL representatives. Shri Ramesh Agrawal, the exiting Promoter and Managing Director will continue to lead the Company as Managing Director for a period of 5 years. GPIL will nominate its Directors on the Board and one of Director to be nominated by GPIL shall be Executive Director of JPL. Upon consummation of full transaction GPIL will have majority of Directors on Board of JPL.
This acquisition provides GPIL with strategic growth opportunity to enter into the highly capital-intensive non-ferrous metals business through a cost-efficient, low-capex approach, further enhancing the diversification of its business model.
GPIL Board in its meeting held on 6th November 2024 had approved to acquire stake in RG Pigments Pvt Ltd (RGPL). Since GPIL is now proposing to acquire 51% stake in JPL and under proposed transaction, RGPL will continue to be a subsidiary of JPL with 100% stake. Therefore, the proposed transaction with RG Pigments stands cancelled.
Mr. B. L. Agrawal, Managing Director of GPIL, Stated, "GPIL's strategic acquisition of a majority stake in JPL aligns with its ESG objectives, advancing its commitment to portfolio diversification and environmental sustainability. This move not only strengthens GPIL's asset base but also mitigates risk and unlocks new market opportunities, underscoring the company's dedication to responsible growth. We are confident this acquisition will drive sustained growth and deliver significant value to all stakeholders.
Mr Ramesh Agarwal, Managing Director of Jammu Pigments, said: "We are delighted to Partner with Godawari Power and Ispat Limited as a Strategic partner through an acquisition of majority stake of 51% in Jammu Pigments Limited. GPIL's deep technical expertise and experience in managing dynamic, high-performing organizations make them exceptionally well-suited to guide our company into its next level. Their long-term commitment to our vision, combined with their strategic insights, positions us to achieve a higher growth trajectory and unlock new opportunities." |
