Tata Steel today said it has made the Tinplate Company of India (TCIL) its subsidiary by increasing its stake in the company by 16.57% to 59.45%, following which the TCIL shares went up by over 15% on the bourses in the late afternoon trade.
"TCIL has become a subsidiary of the company with effect from April 1, 2011, consequent to increase in the company's shareholding in TCIL from 42.88% to 59.45%," Tata Steel said in a filing to the Bombay Stock Exchange (BSE).
This increase is due to automatic and compulsory conversion of three% fully convertible debentures of Rs 100 each into equity, the filing added.
According to a TCIL filing to the stock exchanges, it has alloted 3,27,04,209 equity shares of Rs 10 each at a premium of Rs 45, following the conversion of the debentures.
"The takeover code is not applicable here. We are not making any Open Offer. Our share in TCIL has gone up due to conversion of convertible debentures as per the terms of the instrument," a Tata Steel spokesperson said.
Following the news, the scrip of TCIL had gone up by 15.28% at 1400 hours on the BSE and were trading at Rs 74.30 apiece.
More From This Section
Similarly, the Tata Steel shares were also in green on the BSE and was up by 1.03% at Rs 626.90 apiece.
Established in 1920, TCIL currently is the largest domestic producer of tin coated and tin free steel sheets and is expanding its capacity to 3,79,000 tonne per annum.
In 1982, the Tata Steel has taken over the management control of the company by acquiring shares of Burmah Oil - then majority shareholder. However, TCIL has not been made a subsidiary till date.
TCIL also exports about 20-25% of its production to the markets of South-east Asia and some developed countries in Europe, according to its website.
The company had posted a net profit of Rs 7.91 crore for the quarter ended December 31, 2010 and had a net sales of Rs 158.95 crore.