Bharat Forge to consolidate all defense-related investments under KSSL

24 Feb 2023 , 10:24 AM

Bharat Forge, a forging company backed by the Kalyani Group, received approval on Thursday to consolidate all of its defense-related investments under one entity. To accomplish this, the company will sell its stake in Aeron Systems (Aeron) to Kalyani Strategic Systems (KSSL). Bharat Forge owns both companies entirely.

Bharat Forge stated in a regulatory filing on Thursday, ‘the company has decided to house all of its defense-related investments under KSSL, a wholly-owned subsidiary of the company, for better strategic alignment.’

“As part of its strategic decisions, the company has authorized the transfer of its stake in Aeron to KSSL. In exchange for the ownership transfer, the company will subscribe to equity shares of KSSL, thereby strengthening its investment portfolio.”

Currently, Bharat Forge owns 1,36,500 equity shares with a face value of Rs10 each, totaling to approximately 37.14% of Aeron’s total paid-up capital.

Furthermore, as payment for acquiring the said stake at fair value, KSSL will issue and allot to Bharat Forge 1,37,18,250 equity shares with a face value of Rs10 each at par.

According to Bharat Forge, the proposed internal restructuring provides no benefit to the promoter/promoter group/group companies. This is because KSSL and Aeron are both wholly-owned subsidiaries and associates of the company.

Following the transfer of equity shares, Aeron will become a KSSL associate.

At around 10.16 AM, Bharat Forge was trading 0.20% lower at Rs828.50, against the previous close of Rs830.15 on NSE. 

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