Stalwart Advisors

Merger of RHI Entities with ORL

Orient Refractories has announced that board has approved merger of RHI India & RHI Clasil, other RHI entities in India, with ORL.

The total turnover of all three entities combined during FY18 was Rs 1,235 Cr. almost twice of Orient Refractories, whereas the operating profit and net profit were Rs 232 Cr. and 140 Cr. respectively.

RHI India is wholly owned subsidiary of RHI whereas RHI Clasil is 53.7% owned.

Total number of new shares in ORL to be issued are 4 Cr. i.e. a 33% dilution, existing shares are 12.1 Cr.

RHI India’s holding will be 70% in the combined entity where as 5% would be held by other Individuals related to RHI.

The merger is happening at about 1.15x trailing sales and prima facie looks favourable to minority shareholders of ORL as it is EPS accretive and also makes ORL the largest refractory company in India with a comprehensive product portfolio. This consolidates entire operations of RHI India into one entity and removes any risk of transfer pricing as well.

The entire process will take about 9-12 months.

We will share more updates on this key development along with Q1FY19 Result/AGM Note.

Link to Press Release & Presentation:
https://www.bseindia.com/xml-data/corpfiling/AttachLive/65a555db-5961-4177-8407-3523d40b894e.pdf


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