Welspun Corp was locked at 10% upper circuit at Rs 64.40 at 12:05 IST on BSE after the company announced that its subsidiary has entered into a share sale agreement with Leighton Group to sell its entire stake in Leighton Welspun Contractors India.
The announcement was made before market hours today, 30 December 2013.
Meanwhile, the S&P BSE Sensex was down 11.53 points or 0.05% at 21,182.05.
On BSE, 8.43 lakh shares were traded in the counter with pending buy orders of 20,303 shares at upper circuit. The stock has an average daily volume of 1.21 lakh shares in the past one quarter.
The stock hit a high of Rs 64.40 and a low of Rs 55.05 so far during the day. The stock had hit a 52-week high of Rs 110.65 on 9 January 2013. The stock had hit a 52-week low of Rs 26.65 on 21 August 2013.
The stock had outperformed the market over the past one month till 27 December 2013, gaining 68.73% compared with the Sensex's 3.79% rise. The scrip also outperformed the market in past one quarter, surging 103.65% as against Sensex's 7.43% rise.
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The small-cap company has equity capital of Rs 131.47 crore. Face value per share is Rs 5.
Welspun Corp (WCL) before market hours today, 30 December 2013 announced that its 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, the company said.
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.
Welspun Corp said it 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 Corp said. Welspun Group intends to concentrate on businesses which have potential to give it scale consistent with its quest for being in leadership position, the company said.
The transaction between Welspun Corp and Leighton Group shall be completed in the first quarter of 2014 once the procedural conditions are met, the company added.
Welspun Corp (WCL) 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.
Welspun Corp reported consolidated net loss of Rs 28.16 crore in Q2 September 2013, as against net loss of Rs 24.74 crore in Q2 September 2012. Net sales rose 15.6% to Rs 2479.95 crore in Q2 September 2013 over Q2 September 2012.
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