Welspun Corp to acquire steel business of Welspun Steel

FPJ Web DeskUpdated: Monday, June 28, 2021, 11:35 PM IST
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Welspun Corp to acquire division of the demerged company Welspun Steel | Welspun India

Welspun Corp will acquire the division of the demerged company Welspun Steel Limited (WSL), which is engaged in the manufacturing of BIS Certified Steel Billets and Direct Reduced Iron (DRI), specialty steel and thermo mechanical treatment bars manufacturing business.

The scheme provides for demerger of the demerged undertaking and investments held in Welspun Specialty Solutions Limited (WSSL) (50.03%), Anjar TMT Steel Private Limited (ATSPL) (100%) and Welspun Captive Power Generation Limited (WCPGL) (2.95%).

The company informed the exchange that the Board of directors of the company at its meeting held on June 28, 2021 has decided to propose the scheme of arrangement between Welspun Steel Limited (WSL) and Welspun Corp to NCLT for transfer of WSL’s steel division to the company, subject to regulatory and other approvals.

In addition, the company stated, “After a thorough due diligence by the Independent Agencies, the Board has decided to propose the Scheme of Arrangement to NCLT. The consideration of Rs 362.73 cr will be paid through 6% Cumulative Redeemable Preference Shares, redeemable after 18 months from issuance date, and there will be no equity dilution for WCL shareholders.”

WSL is a privately held company, situated in Welspun City, Anjar. In its steel division, it manufactures BIS Certified Steel Billets and Direct Reduced Iron (DRI), and is implementing a Greenfield project for manufacturing of TMT bars. The company stated the expected project cost is Rs 175 crore (plus soft cost) and the project is expected to be completed by September 2022.

Besides, as a part of its steel division, WSL holds 50.03 per cent shares in Welspun Specialty Solution Ltd (WSSL), a listed company.

Since the stakeholders who are holding not less than 50 per cent of the equity shares in the WSL (holding company of WSSL) are the same stakeholders holding not less than 50 per cent equity shares in the Welspun Corp, the indirect acquisition of control of WSSL is exempt from making open offer under the provisions of the SEBI (SAST) Regulations, 2011, the company stated.

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