On Tuesday, Government-owned iron ore company National Mineral Development Corporation (NMDC) announced that the company’s board of directors, today, at its meeting approved the demerger between NMDC Limited and NMDC Steel Limited.
“This is to inform you that the Board of Directors of NMDC Ltd, at its meeting held today, July 13, 2021, has approved the Scheme of Arrangement for Demerger between NMDC Ltd and NMDC Steel Ltd (‘Resulting Company’) and their respective shareholders, pursuant to Sections 230 to 232 and other applicable provisions of the Companies Act, 2013,” read the statement.
The said scheme is subject to the statutory and regulatory approvals by the market regulator Securities and Exchange Board of India, stock exchanges, Ministry of Corporate Affairs, Government of India and respective shareholders and creditors, said NMDC.
Shares of NMDC rose after the announcement of the demerger. The stock climbed 5% at ₹174 per share on the BSE on Tuesday.
”The Demerged Undertaking would be vested with NMDC Steel Limited pursuant to the demerger. The entire share capital of the NMDC Steel Limited held by the NMDC Limited would be cancelled and new equity shares of NMDC Steel Limited (in a manner as elucidated in the Scheme) would be issued to all the shareholders of NMDC Limited in the same proportion,” it said.
NMDC Limited is a government company that explores several minerals like iron ore, copper, rock phosphate, limestone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, and beach sands. It operates in the field of mining mineral processing so as to meet the demand of the national and international market.
NMDC Steel is a wholly-owned subsidiary of NMDC Limited. NMDC Steel is authorized by its Memorandum of Association to carry out its operations in manufacturing, prospecting, raising, operating, buying, selling, importing, exporting and engaging in the business of steel and iron ore.