Polycab India Limited (PIL) announced it has signed an agreement with Renuka Investments and Finance Limited, a wholly owned subsidiary of Hindalco Industries Limited, to divest the entire equity shareholding in Ryker Base Pvt. Ltd. (Ryker).
Ryker was a wholly-owned subsidiary of PIL. The enterprise value is pegged at Rs 3,230 mn. Post-debt and working capital adjustments, the sale consideration is likely to be around Rs.1,675 mn.
Consolidated debt in PIL financials is likely to reduce by about Rs1,575 mn which pertains to external commercial borrowing and working capital loan of Ryker. The transaction is expected to be completed by December end and is subject to fulfilment of certain conditions by both parties as well as applicable customary approvals.
Inder T. Jaisinghani, Chairman & Managing Director of Polycab India Limited said, “Ryker facility uses state of the art technology and is a great asset. After exploring various strategic options we believe this deal is a win-win proposition as the multi year tolling arrangement will ensure our supply chain dynamics remain intact and we continue to deliver highest quality of products to our customers. It also reflects our enduring focus on disciplined and optimal capital allocation while safeguarding our business interests. Additional financial resources will be utilised to intensify growth and make Polycab a formidable player in electricals space.”
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