Texmaco Rail & Engineering added 2.82% to Rs 44.14 after the company's board approved a proposal to transfer Rail EPC business via slump sale to two separate subsidiaries of the company.
In an exchange filing made after trading house yesterday, the company announced that the board of directors at its meeting held on Tuesday (14 March 2023) has approved to transfer, assign, restructure or convey the whole or substantially the whole of Rail EPC business comprising of Kalindee Rail and Bright Power units i.e. two business undertakings of the company, by way of slump sale, as a 'going concern', to two separate wholly owned subsidiaries of the company.
The two acquiring entities shall be two wholly owned subsidiaries of the company, one of which shall be Texmaco Rail Electrification and other wholly owned subsidiary, which is in process of incorporation.
For the year ended 31 March 2022, Kalindee Rail Unit had recorded turnover of Rs 566.87 crore. Bright Power Unit's turnover for the same period was Rs 191.32 crore.
"Upon receipt of approval from the relevant stakeholders, the slump sale shall be effective with effect from 1st April, 2023, Texmaco Rail said in a statement.
Offering the rationale for the said sale, Texmaco Rail stated that the company has been evaluating its position and business strategy and exploring various options to remain ahead of the competition. The company believes that rationalizing its structure, will provide opportunities to enhance shareholders' value in the company.
Texmaco Rail & Engineering is a diversified heavy engineering company, with products including railway freight wagons, hydro-mechanical equipment and industrial structures for infrastructure industry, locomotive components and locomotive shells, railway bridges, steel castings, and pressure vessels, etc.
The company's consolidated net profit surged to Rs 12.81 crore in the quarter ended December 2022 as against Rs 1.63 crore during the previous quarter ended December 2021. Sales rose 32.82% to Rs 624.89 crore in Q3 FY23 over Q3 FY22.
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