Mahindra Forgings to rank second post-merger

Mahindra Forgings Ltd on Thursday said the proposed merger of its three subsidiaries with the company will propel it to the position of second largest forging player in the Indian market.

Post merger the combined turnover of all the entities is estimated to be in the region of Rs 2,000 crore (Rs 20 billion) based on 2006-07 financials, making it the second largest forging player in the Indian market, Mahindra Forgings said in a communique to the Bombay Stock Exchange.

As per the proposed merger, Mahindra Forgings would amalgamate Mahindra Stokes Holding Company Ltd, Mahindra Forgings Overseas Ltd and Mahindra Forgings Mauritius Ltd with itself.

The merger plan involves merging the three entities - MFOL, which owns 100 per cent of Jeco Holdings AG; MFML that owns 100 per cent stake in Schoneweiss and Co GmbH; and MSCHL, which owns 99.8 per cent of Stokes Group Ltd, into Mahindra Forgings Ltd.

After the merger - approved by the company's board on June 5 - Jeco Holdings AG, Schoneweiss and Co GmbH and Stokes Group Ltd, would become close to 100 per cent subsidiaries of Mahindra Forgings. According to the swap ratio, 103 equity shares of Rs 10 each of Mahindra Forgings would be issued for every 20 shares held in MSHCL.

Mahindra Forgings would allot 49 equity shares for every 20 fully paid-up shares of Re 1 each in MFOL, and 73 shares for every 20 equity shares of Re 1 each held in MFML. The proposed scheme is subject to shareholders and other requisite approvals.