Kalpataru Power board okays JMC Projects merger with self in a swap ratio of 1:4 shares

The board of directors of Kalpataru Power Transmission on Saturday approved the merger of JMC Projects (India) with itself in a swap ratio of one share of Kalpataru Power for every four shares held by JMC shareholders. The merger is expected to be completed in Q4FY23 subject to regulatory approvals

“With the appointed date of April 1, 2022, the merger process is expected to be completed in Q4FY23. The merger is subject to approvals from the Gujarat bench of National Company Law Tribunal, statutory authorities, stock exchanges, shareholders, creditors and such other authorities,” the company said.

Manish Mohnot, MD & CEO of Kalpataru Power told FE, “The merger of two listed companies complementary to each other will make the combined entity one of the largest EPC company in the field of transmission & distribution, roads, waterways and engineering and construction. Together we will have an orderbook visibility of Rs 37,000 crore. Out of this Rs 14,000 crore have come in nine months of FY22. We expect another Rs 4,000 crore of order book in Q4FY22.”

As of December 31, 2021, the company had a net debt of Rs 2,000 crore, which included Rs 800 crore of debt towards four road assets and the remaining Rs 1,100 crore towards the core T&D business. “Low leverage position and the merger will allow us to take our six segments to international markets. We already have a presence in 65 countries through our T&D business, and we plan to take our remaining business global post the merger,” Mohnot said.

The company has around 35% of its revenue coming from international business. “We plan to take the revenue from international business to around 50% in the next five years time in alignment with our plan to become $3 billion company in terms of turnover,” Mohnot said.

The company in its statement said the merger will also enhance KPTL’s business portfolio and pre-qualifications by JMC’s expertise in civil works business. At the same time, JMC will be able to leverage KPTL’s expertise, global business access and financial flexibility, to pursue value-creating opportunities by expanding the current business and bid for large-size infrastructure projects. The merger will drive immense operational synergies and cross learnings, thereby improving competitiveness to increase scale and relevance both in India and international EPC markets.

The combined entity will benefit from collective management expertise. The collective management expertise, would in turn enhance the overall corporate capability, provide focused strategic leadership and ability to operate a large business structure.

Post-merger, the combined entity will comprise several high-growth businesses in T&D, Water, Railways, Oil & Gas Pipeline and Urban Infra, which provides balanced earnings visibility and a resilient portfolio, the company said.