Welspun Enterprises (WEL), formerly Welspun Projects, part of the $2.3 billion Welspun Group, is planning to divest its stake in Welspun Energy. Post sale of its renewable business, WEL’s 15.49% minority stake in Welspun Energy does not contribute to the consolidated results of the company.
In order to unlock value for the company, the Board of WEL authorised the monetization of this stake, subject to shareholders’ approval.
As against its investment of Rs 911 million, the stake is proposed to be sold to Welshop Trading, for a consideration of approximately Rs 2.9 billion plus contingent consideration, thereby implying more than 3x returns to the Company on its investment.
In addition to buying out WEL’s stake, Welshop Trading, part of Welspun Group, has agreed to buy out the stake of other shareholders in Welspun Energy at equivalent consideration. The services of both PwC and EY were engaged for this transaction. Khaitan & Co was the joint legal advisor.