Welspun Enterprises to divest 15.49% in Welspun Energy
Welspun Enterprises Ltd (WEL) is looking to divest its entire 15.49% in Welspun Energy.
"The board of directors of the company has, subject to the approval of the members of the company, approved sale of its entire investment of 60,493,342 equity shares representing 15.49% in the paid up equity share capital of Welspun Energy," Welspun Enterprises said in a filing to BSE.
Post sale of its renewable business, Welspun Enterprises' 15.49% minority stake in Welspun Energy does not contribute to the consolidated results of the company, the filing said.
In order to unlock value for the company, the Board authorised the monetisation of this stake, subject to shareholders' approval, it added.
As against its investment of Rs 911 million, the stake is proposed to be sold to Welshop Trading Private Ltd, for a consideration of approximately Rs 2.9 billion plus contingent consideration, thereby implying more than three times returns to the company on its investment.
In addition to buying out Welspun Enterprises' 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.
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On Friday, the stock of Welspun Enterprises closed down 3.17% or Rs 1.95 at Rs 59.50 on the BSE.