Welspun Corp’s (WCL) - subsidiary, Welspun Infra Projects (WIPPL), has entered into a share sale agreement with Leighton Group to sell Welspun’s entire 39.88% stake in Leighton Welspun Contractors India (LWIN) for the net cash consideration of $99 million. With this sale, LWIN will be renamed as Leighton India.
In 2011, Welspun Corp acquired a 35% stake in LWIN for cash consideration of Rs 470 crore, to capitalize on opportunities in the Indian infrastructure sector especially Public-Private Partnership projects and subsequently acquired additional shares in the entity in a cash-less transaction worth Rs 115 crore.
The company has decided to exit LWIN to enable Welspun to redirect its efforts and reposition itself in the infrastructure space which has synergies with its other businesses. To streamline the structure, Welspun Infratech has also entered into an agreement with Welspun Infra Developers to acquire its 40% stake in WIPPL.
The net proceeds received by Welspun will primarily be utilized to deleverage its balance-sheet. Welspun Group intends to concentrate on businesses which have potential to give it scale consistent with its quest for being in leadership position. The transaction between Welspun Corp and Leighton Group shall be completed in the first quarter of 2014 once the procedural conditions are met.
Welspun Corp is currently in four businesses viz Line Pipes, Energy, Infrastructure & Steel and enjoys a global leadership position in the first two businesses. It may be recalled that Welspun Corp is already in advanced stages of demerging the parts of its business other than Line Pipes into Welspun Enterprises through a court process.
In 2011, Welspun Corp acquired a 35% stake in LWIN for cash consideration of Rs 470 crore, to capitalize on opportunities in the Indian infrastructure sector especially Public-Private Partnership projects and subsequently acquired additional shares in the entity in a cash-less transaction worth Rs 115 crore.
The company has decided to exit LWIN to enable Welspun to redirect its efforts and reposition itself in the infrastructure space which has synergies with its other businesses. To streamline the structure, Welspun Infratech has also entered into an agreement with Welspun Infra Developers to acquire its 40% stake in WIPPL.
The net proceeds received by Welspun will primarily be utilized to deleverage its balance-sheet. Welspun Group intends to concentrate on businesses which have potential to give it scale consistent with its quest for being in leadership position. The transaction between Welspun Corp and Leighton Group shall be completed in the first quarter of 2014 once the procedural conditions are met.
Welspun Corp is currently in four businesses viz Line Pipes, Energy, Infrastructure & Steel and enjoys a global leadership position in the first two businesses. It may be recalled that Welspun Corp is already in advanced stages of demerging the parts of its business other than Line Pipes into Welspun Enterprises through a court process.
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