National Mineral Development Corporation (NMDC) announced on Tuesday that its Board of Directors has green-lit the demerger between NMDC Limited and NMDC Steel Limited.
"The Board of Directors of NMDC Limited, at its meeting held today, July 13, 2021, has approved the Scheme of Arrangement for Demerger between NMDC Limited (" Demerged Company") and NMDC Steel Limited ("Resulting Company") and their respective shareholders, pursuant to Sections 230 to 232 and other applicable provisions of the Companies Act, 2013," NMDC said via a regulatory filing.
"The demerged undertaking would be vested with NMDC Steel Limited pursuant to the demerger. The entire share capital of the NMDC Steel Limited held by the NMDC Limited would be cancel led and new equity shares of NMDC Steel Limited (in a manner as elucidated in the Scheme) would be issued to all the shareholders of NMDC Limited in the same proportion,'' the company said.
The corporation has stated the demerger scheme is still subject to necessary statutory and regulatory approvals, including the approval of the Securities and Exchange Board of India (SEBI), stock exchanges, ministry of corporate affairs, respective shareholders and creditors.
NMDC is a government-owned mineral producer, and is under the administration of the steel ministry. While NMDC Steel Limited is a wholly-owned subsidiary of NMDC Limited.
"NMDC Steel Limited currently does not have any business operations. It is authorised by its Memorandum of Association to carry on the business of, amongst others, manufacturing, prospecting, raising, operating, buying, selling, importing, exporting or otherwise dealing in various categories of steel and iron ore," read the regulatory filing. =
NMDC shares jumped to Rs 174 per share on the Bombay Stock Exchange BSE soon after the demerger was announced.
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