BSRM Steels, the flagship company of BSRM Group, plans to merge with BSRM Steel and Iron Company through a provision to be sanctioned through a court approval.
The merger of the country’s oldest and largest steel maker is expected to align the activities of a single value chain within one legal entity.
“The company has decided to merge under the provision of of the Companies Act by transferring all assets and liabilities of BSRM Iron and Steel Company to BSRM Steels Limited,” the company said in a statement yesterday.
The merger is subject to the consent of shareholders at its emergency general meeting scheduled for March 30 and approval from the High Court division.
This is one of the biggest internal corporate developments within the Group in recent times for consolidating the group’s strength and to grow the conglomerate.
The Chittagong-based BSRM Steels had recently enhanced capacity after successful completion of BMRE (Balancing, Modernisation, Rehabilitation and Expansion) work.
After the BMRE, the company’s annual production was enhanced to 7,00,000 metric tonnes from 6,00,000 metric tonnes. The company had to shut down mill from November 15 to December 7 last year to complete the BMRE work.
The company is mainly engaged in production and supply of “Xtreme 500W” deformed bars of reinforced steel. It had commenced its commercial operation in April, 2008.
To meet its total requirement, most of its raw materials are imported from Japan, Taiwan, Korea, Turkey, North America and South America. Yesterday on Dhaka Stock Exchange, its share prices rose sharply 8.2% to Tk93.3 a share. The company remained most favourite of the investors as it was the most traded stocks with shares worth Tk56.6 crore—the highest one-day trading turnover by a company in recent years.
BSRM Steels made more than Tk209.7 crore net profit in 2015, up nearly 70% from almost Tk124 crore made in 2014. BSRM Group is involved in steel sector since 1930 in the region.
Earlier, BSRM Steel increased its paid-up capital by issuing 10,450,000 ordinary shares of Tk10 each for the purpose of acquiring non-listed BSRM Iron and Steel Company at the ratio of one BSRM Steels shares to one BSRM Iron and Steel Company shares on November 10, 2010.
Bangladesh has more than 400 steel, re-rolling and auto-rerolling mills with a combined annual production capacity of eight metric tonnes against the total demand of only 4 million tonnes.
The government projects account for nearly 40% of total steel consumption.