Global Steel Holdings Ltd. [GSHL] has taken control of Ispat Industries Ltd. [IIL] by acquiring majority stakes in Ispat Steel Holdings [ISH] and other foreign and Indian investment companies, which together hold 52.68% in the company. ISH currently holds 37.14% in IIL, while GIHL and Securex Holdings hold 6.73% and 3.48%, respectively. Indian promoter companies hold 4.83% (Nair, The Economic Times, 2009). [Note: What ever happened to this addition? Last time I checked, the total is only 52.18%, I wonder where the missing 0.5% went? Possibly due to rounding, or personal funds, or an accounting glitch, or simply unaccounted for, or something?]
In its 2004-05 Annual Report, GSHL held 37,6254,890 equity shares of IIL, representing a 54.32% stake [compared to 52.68% above]. Experts, however, agree that this will help Ispat Industries to leverage the $7 billion balance sheet of GSHL (The Business Standard, 2009). Leveraging is finance lingo for “investing with borrowed money as a way to amplify potential gains (at the risk of greater losses)” (Morales & Gilner, 2009). [Note: What probably happened between 18 days from the publication of Nair’s Economic Times article to the printing of The Business Standard’s feature was that another investor company switched allegiance, and joined team GSHL?]
GSHL Shares in IIL
Accordingly, some Ispat Group companies became subsidiaries of GSHL, such as Ispat Steel Holdings, Ispat Holdings [P], Ispat Finance, Mudra Ispat, Denro Holding [P], Mita Holdings [P], Goldline Tracom [P], Gontermann Peipers (India), GPI Investments [P], GPI Textiles, Kartik Credit [P], Kamrup Fabricators [P], Rajgarh Trading Co [P], Sanvatsari Investments [P], Ushaditya Investments [P], Waterloo Trade & Commerce [P], Dankuni Investments (The Business Standard, 2009), Nippon Ispat Singapore (Pte) and Ispat Energy (Nair, The Economic Times, 2009). [Note: [P] after a company’s denotes privately-held.] Pramod Mittal is also the named Chairman of the Board for both Gontermann-Peipers (India) Ltd. as well as Balasore Alloys Ltd., and aDirector for eVentures India (BusinessWeek, 2009). The last two companies are seemingly absent.
Other “fellow’ subsidiaries listed in IIL’s Annual Report 2007-08 (p. 91-92, 2008) are Kanoria Plastokem (P) Ltd, Elephanta Gases Ltd., Geetapuram Port Services Ltd., Peddar Realty (P) Ltd., and Amba River Coke (P) Ltd. Mauritius’s Erebus Ltd is also listed as a subsidiary company and Kalyani Mukand Ltd as associate company. All the “fellow’ subsidiaries, including those previously abovementioned GSHL subsidiaries, with the exception of Nippon Ispat Singapore (Pte), Ispat Energy and Erebus Ltd., ceased to be subsidiaries effective 23 November 2007.
IIL’s Annual Report 2007-08 (p. 60, 2008), moreover, disclosed that the promoter group, synonymous to GSHL, held 42.44% or 518,774,171 shares; Financial Institutions, Banks, Insurance Companies and Mutual Funds held 20.18%; NRIs, overseas commercial banks [OCBs], and other foreign shareholders (other than Promoter Group or GSHL) held 2.94; while the 34.44% was publicly held. Thus, GSHL lost direct control of IIL effective 23 November 2007. Chatterjee (2009) reporting for The Economic Times on 01 June 2009, wrote that the Mittal promoters, or GSHL, own 41.0% of IIL!
Notes:
All foreign exchange rates for US Dollar to Indian Rupee, based on the online database published by: FXTrade Forex Trading. Exchange rate used for conversion, Interbank rates, were the average for the whole month when such statements were published.
BusinessWeek (2009). Ispat Industries Ltd. (ISPT:Bombay Stock Exchange) Board of Directors, BusinessWeek. New York: The McGraw-Hill, Accessed 02 February 2009. back to text: 1 | 2 | 3
Chatterjee, Dev (2009). Ispat promoters pledge entire stake with lenders. New Delhi: The Economic Times, 01 June 2009. back to text.
Ispat Industries Limited (2008). Annual Report 2007-08. Kolkata: Ispat Industries Limited, June 2008. p. 9, 12-19, 51, 60. back to text
Ispat Industries Ltd. [IIL] (2008). Audited Financial Results for the Year Ended 31 March 2008. Mumbai: Ispat Industries Limited, 30 June 2008. back to text
Kalesh, Baiju (2009). Ispat Industries moves lenders for debt recast. New Delhi: LiveMint, The Wall Street Journal, 04 February 2009. back to text
Morales, Franc and Leah Gilner (2001-2009). TheSage’s English Dictionary and Thesaurus. Princeton University. back to text
Nair, Suresh (2005). Global Steel takes control of Ispat Industries. New Delhi: The Economic Times, 09 September 2005. back to text: 1 | 2
The Business Standard (2005). Global Steel holds 54% in Ispat. Mumbai: The Business Standard, 27 September 2005. back to text
Disclaimer: The posts on this site do not necessarily represent any organization’s positions, strategies or opinions; and unless otherwise expressly stated, are licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.
Understanding GSHL: Red Marks The Ispat
Tags: Steel Demand, Global Steel Holdings Ltd., GSHL, India, Restructuring, Board of Directors, Balance Sheet, Domestic Market, Subsidiary, Ispat Industries Ltd, IIL, Steel Price, Creditor, Natural Gas, Shareholding, Ispat Steel Holdings, ISH, Securex Holdings, Annual Report, Equity Share, Leveraging, Ispat Holdings [P], Ispat Finance, Mudra Ispat, Denro Holding [P], Mita Holdings [P], Goldline Tracom [P], Gontermann Peipers (India), GPI Investments [P], GPI Textiles, Kartik Credit [P], Kamrup Fabricators [P], Rajgarh Trading Co [P], Sanvatsari Investments [P], Ushaditya Investments [P], Waterloo Trade & Commerce [P], Dankuni Investments, Nippon Ispat Singapore (Pte), Ispat Energy, Balasore Alloys Ltd., eVentures India, Net Profit, Crore, Net Loss, International Market, Input Cost, Ispat Metallics India Ltd., Global Downturn, Industrial Development Bank of India, IDBI, IFCI, ICICI Bank, UTI, Interest Rate, Repayment Schedule
Global Steel Holdings Ltd. [GSHL] has taken control of Ispat Industries Ltd. [IIL] by acquiring majority stakes in Ispat Steel Holdings [ISH] and other foreign and Indian investment companies, which together hold 52.68% in the company. ISH currently holds 37.14% in IIL, while GIHL and Securex Holdings hold 6.73% and 3.48%, respectively. Indian promoter companies hold 4.83% (Nair, The Economic Times, 2009). [Note: What ever happened to this addition? Last time I checked, the total is only 52.18%, I wonder where the missing 0.5% went? Possibly due to rounding, or personal funds, or an accounting glitch, or simply unaccounted for, or something?]
In its 2004-05 Annual Report, GSHL held 37,6254,890 equity shares of IIL, representing a 54.32% stake [compared to 52.68% above]. Experts, however, agree that this will help Ispat Industries to leverage the $7 billion balance sheet of GSHL (The Business Standard, 2009). Leveraging is finance lingo for “investing with borrowed money as a way to amplify potential gains (at the risk of greater losses)” (Morales & Gilner, 2009). [Note: What probably happened between 18 days from the publication of Nair’s Economic Times article to the printing of The Business Standard’s feature was that another investor company switched allegiance, and joined team GSHL?]
GSHL Shares in IIL
Accordingly, some Ispat Group companies became subsidiaries of GSHL, such as Ispat Steel Holdings, Ispat Holdings [P], Ispat Finance, Mudra Ispat, Denro Holding [P], Mita Holdings [P], Goldline Tracom [P], Gontermann Peipers (India), GPI Investments [P], GPI Textiles, Kartik Credit [P], Kamrup Fabricators [P], Rajgarh Trading Co [P], Sanvatsari Investments [P], Ushaditya Investments [P], Waterloo Trade & Commerce [P], Dankuni Investments (The Business Standard, 2009), Nippon Ispat Singapore (Pte) and Ispat Energy (Nair, The Economic Times, 2009). [Note: [P] after a company’s denotes privately-held.] Pramod Mittal is also the named Chairman of the Board for both Gontermann-Peipers (India) Ltd. as well as Balasore Alloys Ltd., and aDirector for eVentures India (BusinessWeek, 2009). The last two companies are seemingly absent.
Other “fellow’ subsidiaries listed in IIL’s Annual Report 2007-08 (p. 91-92, 2008) are Kanoria Plastokem (P) Ltd, Elephanta Gases Ltd., Geetapuram Port Services Ltd., Peddar Realty (P) Ltd., and Amba River Coke (P) Ltd. Mauritius’s Erebus Ltd is also listed as a subsidiary company and Kalyani Mukand Ltd as associate company. All the “fellow’ subsidiaries, including those previously abovementioned GSHL subsidiaries, with the exception of Nippon Ispat Singapore (Pte), Ispat Energy and Erebus Ltd., ceased to be subsidiaries effective 23 November 2007.
IIL’s Annual Report 2007-08 (p. 60, 2008), moreover, disclosed that the promoter group, synonymous to GSHL, held 42.44% or 518,774,171 shares; Financial Institutions, Banks, Insurance Companies and Mutual Funds held 20.18%; NRIs, overseas commercial banks [OCBs], and other foreign shareholders (other than Promoter Group or GSHL) held 2.94; while the 34.44% was publicly held. Thus, GSHL lost direct control of IIL effective 23 November 2007. Chatterjee (2009) reporting for The Economic Times on 01 June 2009, wrote that the Mittal promoters, or GSHL, own 41.0% of IIL!
Notes:
All foreign exchange rates for US Dollar to Indian Rupee, based on the online database published by: FXTrade Forex Trading. Exchange rate used for conversion, Interbank rates, were the average for the whole month when such statements were published.
BusinessWeek (2009). Ispat Industries Ltd. (ISPT:Bombay Stock Exchange) Board of Directors, BusinessWeek. New York: The McGraw-Hill, Accessed 02 February 2009. back to text: 1 | 2 | 3
Chatterjee, Dev (2009). Ispat promoters pledge entire stake with lenders. New Delhi: The Economic Times, 01 June 2009. back to text.
Ispat Industries Limited (2008). Annual Report 2007-08. Kolkata: Ispat Industries Limited, June 2008. p. 9, 12-19, 51, 60. back to text
Ispat Industries Ltd. [IIL] (2008). Audited Financial Results for the Year Ended 31 March 2008. Mumbai: Ispat Industries Limited, 30 June 2008. back to text
Kalesh, Baiju (2009). Ispat Industries moves lenders for debt recast. New Delhi: LiveMint, The Wall Street Journal, 04 February 2009. back to text
Morales, Franc and Leah Gilner (2001-2009). TheSage’s English Dictionary and Thesaurus. Princeton University. back to text
Nair, Suresh (2005). Global Steel takes control of Ispat Industries. New Delhi: The Economic Times, 09 September 2005. back to text: 1 | 2
The Business Standard (2005). Global Steel holds 54% in Ispat. Mumbai: The Business Standard, 27 September 2005. back to text