Alstom-Schneider announced plans today to make an open offer to acquire 20 per cent additional stake in Areva T&D India.
This comes after the French promoter of Areva sold its global transmission and distribution (T&D) business, this January, to a consortium of Alstom and Schneider Electric. They beat a combine of GE and Toshiba-INCJ, in a deal valued at ¤2,290 million (Rs 16,000 crore).
Areva group companies own 72 per cent stake in the Rs 2,825-crore Areva T&D India, which has a market capitalisation of Rs 7,150 crore. Alstom Schneider’s open offer in India has been made to acquire up to 47.8 million shares. The offer is being made at a price of Rs 295.34 for each share. The offer opens on July 22 and closes on August 10. DSP Merrill Lynch which is the manager of this offer.
The news caused the shares to rally in today’s trade. They went up by Rs 19 or seven per cent, to close at Rs 286 per share. The share also hit a monthly high, at Rs 292.
Areva T&D is one of the largest Indian companies players in the T&D business. The company is also investing heavily in India. It is setting up a transformer and medium voltage switchgear manufacturing unit and power transformer manufacturing units in Baroda, besides a global research and development centre, also in Baroda. It also had large manufacturing facilities in Baroda.
In the quarter ended March 31, the net profit was down 93 per cent to Rs 3.5 crore and its revenues were down 10.7 per cent to 776 crore. The company’s order book as on March 31 was Rs 4,900 crore.
“Sales revenue and operating income declined during the quarter, which is attributed to a cumulative effect of postponement of customer projects, continued price pressures during the last one and a half years, ramp-up costs in our new factories, higher provisioning of a few systems projects and derivatives’ mark-to-market adjustment,” the company had then said in a statement.
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Areva T&D’s acquirer, Alstom SA France, a global leader in power generation and rail infrastructure, has been present in India since 1910. Its arm, Alstom Projects India, has a turnover of Rs 2,330 crore and is listed on the stock exchanges. Alstom in India offers a composite range of equipment and services related to power generation for utilities and industrial users, transportation systems covering traction, signalling and train control for the railways and energy management for a variety of industries.
Alstom’s partner, Schneider Electric, has revenues of over Rs 600 crore from the power business in India and it is the largest business segment for the company here. Schneider Electric as a group has a turnover of about Rs1,500 crore in this country from industry segments such as mines, minerals, metals and automation, building business and information technology.