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Prakash Steelage plans to split its equity shares of face value ₹10 each into 10 equity shares of face value ₹1 each.
The decision follows transfer of the seamless stainless steel tubes and pipes division into the joint venture company Tubacex Prakash.
Prakash Steelage will retain 32.47 per cent in the new company.
Post the transaction, Prakash Steelage will be engaged in the business of stainless steel welded tubes and pipes from its Silvasa factory where the existing manufacturing facilities at Umbergaon will be shifted, said the company in a statement.
This apart, the company would continue to carry on its trading activity in stainless steel products.
Prakash Steelage entered into an agreement with Spain-based Tubacex SA and transferred the seamless stainless steel tubes and pipes division into a JV It received ₹209 crore for offering the majority stake in the JV company and used ₹206 crore of this money to repay bank debts, and creditors of the seamless division. The company invested ₹3.15 crore in the equity of the JV firm.
The board also approved an enabling resolution to dilute further equity not exceeding 12.47 per cent in the JV by way of sale of shares to Tubacex SA to further reduce its debts.
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