The board of Siemens has approved the sale of its mechanical drives (MD) business for Rs 440 crore to Flender Drives, a subsidiary of Flender GmbH, which in turn is a subsidiary of Siemens AG.
The sale and transfer of MD business is as going concern and on a slump sale basis, with effect from 1 January 2021. The MD business within Siemens achieved a revenue of Rs 683.80 crore for FY19 and had an operating loss of Rs 55.30 crore. The announcement was made after market hours yesterday, 26 August 2020.Sunil Mathur, the managing director (MD) and chief executive officer (CEO) of Siemens, has said that: "Potential growth in this business will require substantial Capex and moreover, there are no synergies with the existing businesses of Siemens. Keeping the interests of the shareholders in mind, the board of Siemens has approved the sale of this business to Siemens AG which has also announced their intention to publicly list this business via a spin-off."
On a consolidated basis, Siemens reported net loss of Rs 1.90 crore in Q3 June 2020 compared with net profit of Rs 250.10 crore in Q3 June 2019. Net sales tumbled 59.2% to Rs 1,276 crore in Q3 June 2020 over Q3 June 2019.
Shares of Siemens fell 0.48% to Rs 1,225.70. The stock hit a high of Rs 1244.45 and a low of Rs 1223.30 in intraday.
Siemens focuses on the areas of power generation and distribution, intelligent infrastructure for buildings and dis-tributed energy systems, and automation and digitalization in the process and manufacturing industries.
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