Essar Steel has received approval for its capital restructuring from the High Court of Gujarat. The shareholders of the company approved the restructuring scheme nearly two years ago.

According to the proposed scheme, four equity shares out of every 10 shares shall stand cancelled. In lieu of such reduction, four 0.01 per cent cumulative redeemable preference shares of Rs 10 will be issued to shareholders whose shareholding has been reduced due to the proposed capital reduction.

The preference shares will be redeemed at par in four quarterly installments starting October 01, 2017. The remaining six equity shares equity shares of Rs 10 each shall continue to be held by the equity shareholders without any alterations.

The preference shares shall not entitle the holders thereof to any voting rights, except in respect of resolutions, which directly affect the rights attached to the preference shares.

Where the shares are partly paid up, the reduction will apply on a pro rata basis in a manner so as to ensure that the proportion of unpaid amount to the face value of shares is prorata maintained even in the remaining equity shares and in the newly issued preference shares which also shall be to that extent partly paid up.