SAL Steel Limited , a prominent player in the Indian steel industry, has announced significant strategic moves that will reshape its ownership structure and potentially boost its financial position. The company's board has approved two key agreements with Sree Metaliks Limited, marking a major shift in its corporate landscape.

Share Purchase Agreement: A Change in Ownership

The board has given the green light to a Share Purchase Agreement (SPA) that will see the current promoter shareholders, Shah Alloys Limited and SAL CARE Private Limited, sell a substantial portion of their stakes to Sree Metaliks Limited. Specifically:

• Shah Alloys Limited will divest 3,02,56,989 equity shares, representing 33.71% of the diluted equity share capital.
• SAL CARE Private Limited will sell 1,27,02,506 equity shares and 48,00,000 share warrants.

This transaction will result in Sree Metaliks Limited becoming the new promoter of SAL Steel, while the existing promoters will be reclassified as public shareholders.

Share Subscription Agreement: Infusion of Fresh Capital

Simultaneously, the board has approved a Share Subscription Agreement (SSA) with Sree Metaliks Limited. Under this agreement, SAL Steel will issue:

• 1,92,50,000 equity shares at ₹18.00 per share, raising ₹34.65 crores.
• 3,57,50,000 warrants at an exercise price of ₹18.00 per warrant, potentially bringing in an additional ₹64.35 crores.

This preferential allotment aims to raise a total of ₹99.00 crores, significantly strengthening SAL Steel's financial position.

Increase in Authorized Share Capital

To accommodate the new share issuance, the board has approved an increase in the company's authorized share capital from ₹140.00 crores to ₹145.00 crores.

Implications and Next Steps

Post-transaction, Sree Metaliks Limited is expected to hold a 37.99% stake in SAL Steel, cementing its position as the new promoter. This change triggers a mandatory open offer under SEBI regulations, allowing other shareholders an opportunity to exit or stay invested under the new management.

The deals are subject to shareholder approval, which will be sought at the upcoming 22nd Annual General Meeting scheduled for September 26, 2025. Regulatory approvals, including those from SEBI and other relevant authorities, will also be required to complete the transaction.

Financial Considerations

The equity shares and warrants will be issued at ₹18.00 per share, which includes a premium of ₹8.00 over the face value of ₹10.00. For the warrants, 25% of the price will be payable at allotment, with the remaining 75% due upon conversion into equity shares within 18 months.

Market Impact

These strategic moves are likely to have a significant impact on SAL Steel's market position and future growth prospects. The infusion of fresh capital could provide the company with the resources needed for expansion or debt reduction, while the change in promotership might bring new strategic direction and management expertise.

As the steel industry continues to evolve, SAL Steel's new partnership with Sree Metaliks could potentially enhance its competitiveness and market presence. Shareholders and market observers will be keenly watching how this transition unfolds and its implications for the company's performance in the coming years.

The company has emphasized that all disclosures related to these agreements will be available on its website, ensuring transparency for all stakeholders as this significant corporate restructuring moves forward.

SAL Steel , a manufacturer of Ferro Alloys and Sponge Iron, has reported a net loss of Rs 9.68 crore for the first quarter ended June 30. This marks a significant downturn from the net profit of Rs 0.16 crore recorded in the same quarter of the previous year.

Financial Performance

The company's financial results, approved by the Board of Directors on August 14, reveal a mixed picture:

• Revenue from operations increased to Rs 127.55 crore, up from Rs 110.70 crore in the corresponding quarter last year.
• Total revenue, including other operating income, stood at Rs 127.68 crore.
• However, total expenses surged to Rs 140.62 crore, resulting in a loss before tax of Rs 12.94 crore.

Key Factors Affecting Performance

Several factors contributed to the company's financial performance:

1. Rising Costs: The cost of materials consumed rose to Rs 105.72 crore, compared to Rs 95.92 crore in the same quarter last year.
2. Inventory Changes: Changes in inventories of finished goods and work-in-progress amounted to Rs 10.35 crore.
3. Power Costs: Power cost and cost of power generation decreased to Rs 8.92 crore from Rs 12.34 crore year-on-year.
4. Finance Costs: Finance costs rose to Rs 4.93 crore from Rs 3.18 crore in the previous year's quarter.

Earnings Per Share

The company's earnings per share (EPS) for the quarter stood at negative Rs 1.14, compared to Rs 0.02 in the same quarter of the previous year.

Auditor's Observations

The independent auditors, in their review report, highlighted two key issues:

1. Non-provision of Electricity Duty amounting to Rs 90.40 lakh for the quarter.
2. Failure to impair Capital Work in Progress worth Rs 100.94 lakh.

The auditors noted that addressing these issues would have further increased the reported loss for the quarter.

Annual General Meeting

The Board of Directors has approved the Directors' Report for the year ended March 31, and scheduled the 22nd Annual General Meeting for September 26.

Segment Reporting

SAL Steel operates in the Iron & Steel and Power segments. However, due to competitive factors and ongoing company position, the management has not disclosed primary reportable segment information as per Indian Accounting Standard 108.

Despite the challenging quarter, SAL Steel continues to operate within the Indian geographical territory, focusing on its core business of manufacturing Ferro Alloys and Sponge Iron for the Iron & Steel Industry, while also generating power for captive use and trading purposes.