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The Mumbai Bench of National Company Law Tribunal (NCLT) has sanctioned the scheme of amalgamation of two subsidiary companies of RHI Magnesita in India — RHI Clasil and RHI India — into the public listed entity Orient Refractories Ltd (ORL).
RHI Magnesita is among the leading global supplier of refractory products, systems and solutions.
According to Parmod Sagar, MD & CEO of ORL and Regional President of RHI Magnesita, the integration of the three separate legal entities would enable the company to synergise, simplify and consolidate its strength in India and serve its ever growing customers better.
“RHI Magnesita is going to provide customers with one single refractory solutions platform offering the industry’s most comprehensive product and solutions portfolio as an end to end solution provider,” the company said in a press statement.
The board of directors would decide on the further course of action related to the amalgamation, including fixing of the effective date of the amalgamation, in its next meeting.
Improved allocation
“The integration also results in improved allocation of capital and optimisation of cash flows contributing to the overall growth prospects of the new integrated company, creation of a larger asset base and facilitation of access to better financial resources; and enhancement of shareholder value pursuant to economies of scale and business efficiencies,” Sagar said in the statement.
ORL had approved the proposed scheme in its board meeting on July 31, 2018 and the proposed scheme was also approved by the shareholders (including the public shareholders) and creditors of ORL on May 17, 2019. Subsequently, all necessary regulatory and statutory approvals were duly obtained, and the scheme was filed jointly by the three companies with the NCLT at Mumbai for its approval.
However, in an order issued on March 2, 2020, the NCLT rejected the proposed scheme. After carefully assessing the details of the order issued by the NCLT, ORL decided to file an appeal before the National Company Law Appellate Tribunal (NCLAT). The NCLAT by an order dated January 19, 2021, set aside the order passed by the NCLT rejecting the scheme and directed the NCLT to approve the scheme.
Subsequently, NCLT, Mumbai Bench, in its order dated May 5, approved the scheme, the release said.
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