New Delhi: Lloyds Steel, in which Uttam Galva group had acquired 58.35% stake in December, has decided to rename itself as Uttam Value Steels and has sought shareholders approval for the same.
The company’s board has already approved the name change, and now it has sought shareholders approval at the forthcoming Extraordinary General Meeting. “Approval of the members of the company is hereby accorded for change in the name of the company from Lloyds Steel Industries Ltd to Uttam Value Steels Ltd,” Lloyds Steel said in a communique to the shareholders, calling for an EGM on 4 March to seek their approval.
Lloyds Steel, with a production capacity of 1 million tonne per annum (MTPA), has been reporting losses in the last few years. The Miglani family-controlled Uttam Galva group had acquired majority stake in the company in a deal, which was done in three phases. The acquisition was done by the Miglani family through two companies—Ultimate Logistics Solutions Pvt Ltd and Metallurgical Engineering and Equipments Ltd.
In December, the Miglani family had also announced appointment of 3 directors on Lloyds Steels board, including Uttam Galva group Chairman Rajinder Miglani and his son Ankit Miglani. With those appointments, Uttam Galva group had taken over the control of the Lloyds Steel as well. According to the financials of Lloyds Steel, the company has accumulated losses of over Rs.290 crore in the last three financial years.
Besides, it has a total loan portfolio (both, secured and unsecured) of about Rs.384 crore. In the notice to the shareholders, Lloyds has also sought approval to convert 22,69,50,000 redeemable preference shares of Rs.10 each, that was issued to IDBI Bank Ltd into 15 crore equity shares of Rs.10 each at a price of Rs.15.13 per share.
Post conversion, promoters’ (Uttam Galva group’s) stake in Lloyds Steel will come down to 51.02% from existing 58.35%, while IDBI Bank will hold 12.56% stake in the company. Ankit Miglani, deputy managing director of Uttam Galva Steels had said early this month that his group plans to raise Rs.1,500-2,000 crore working capital loan by March to bring Lloyds Steel on track.
Uttam Galva Group and Lloyds Steel had a long business partnership. Uttam Galva’s 0.5 million tonnes per annum (MTPA) pig iron plant and Lloyds’ steel unit are located in Maharashatra’s Wardha district. The Miglanis, who used to sell most of their pig iron to Lloyds before acquisition, can now integrate the operations. World’s largest steel producer ArcelorMittal is also a partner of the Miglani’s controlled group and holds over 33% stake in Uttam Galva Steels.