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Orissa Minerals Development Company Ltd (OMDC), a step-down subsidiary of RINL, has planned capital restructuring and a share split. The exercise involves enlargement of equity through the issue of bonus shares, merger of another group mining company with itself and share sub-division.
Reward for shareholders
According to Steel Ministry sources, the bonus share issue is meant to reward shareholders of the mining company out of its reserves. The share-split is designed to increase the floating stock of OMDC, which is listed on the BSE and the CSE.
“The proposed merger of Bisra Stone Lime Co Ltd (BSLC), another step-down mining subsidiary of RINL, is aimed at bringing about synergy between the two Odisha-based mining companies”, a company insider told Business Line .
The proposed combined entity will also have a balanced capital base. The current paid-up capital of OMDC is Rs 60 lakh, while the paid-up capital of BSLC is Rs 87.29 crore.
OMDC currently has six mines in Odisha with estimated reserves of 206 million tonnes of iron ore and 44 million tonnes of manganese ore. But all are awaiting lease renewal for operations to resume. Bhadrasahi and Thakurani are the company’s biggest mines with a total reserve of 94.36 million tonnes. Kolha-Rodia and Dalki, located in Keonjhar district, are other mines of the company.
BSLC is estimated to have reserves of 300 million tonnes of cement-grade limestone and dolomite within its leasehold area in Sundargarh district. Some of the BSLC mines are operational and, at present, it produces about 1 million tonnes of limestone and dolomite together.
Stock split
The OMDC board proposed the sub-division of existing equity shares of Rs 10 each into 10 equity shares with face value of Re 1 each. The board last week also approved the appointment of a merchant banker to examine various aspects relating to the capital restructuring by way of bonus shares.
>jayanta.mallick@thehindu.co.in
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