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Welspun Enterprises inks definitive agreement to sell its stake in WMSL

19 Aug 2014 Evaluate

Welspun Enterprises has entered into a definitive agreement with JSW Steel, pursuant to which the company shall sell Welspun Maxsteel (WMSL) for an enterprise value of Rs 1,000 crore plus net current assets as on August 31, 2014. This Enterprise Value includes long term debts of WMSL, which is estimated at Rs 1,087 crore as on August 31, 2014.

The company had identified WMSL as its non - core business and therefore has decided to exit the same. It may be pertinent to note that WMSL besides an operating unit has state of the art infrastructure in Salav, Maharashtra which is located near Mumbai. This sale will enable JSW, one of the most prominent players in the Steel industry to effectively utilize the WMSL facility and further expand the business for achieving its strategic goal. In the last few years, due to irregular supply of natural gas from its contracted suppliers, WMSL has not been able to operate at its optimum capacity.

The transaction will strengthen the company’s capabilities by synergizing all resources and reduce the net debt liabilities considerably. The transaction is subject to relevant statutory and third party approvals commensurate with a transaction of similar nature.

Peers
Company Name CMP
Redington 220.50
Adani Enterprises 2479.00
Amrapali Industries 18.71
Rashi Peripheral 493.70
PDS 278.25
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