Welspun Corp surged 7.78% to Rs 146.20 at 09:31 IST on BSE after the company announced value unlocking of about Rs 940 crore.
The announcement was made yesterday, 31 March 2019.Meanwhile, the S&P BSE Sensex was up 245.96 points, or 0.64% to 38,918.87
On the BSE, 1.19 lakh shares were traded in the counter so far compared with average daily volumes of 1.35 lakh shares in the past two weeks. The stock had hit a high of Rs 149 and a low of Rs 141.80 so far during the day.
Welspun Corp announced value unlocking of approx. Rs 940 crore through the divestment of its Plate and Coil Mill Division (PCMD) and its 43 MW Power Division. The sale consideration for PCMD is Rs 848.5 crore, and closing adjustments pertaining to Net Current Assets as of Closing Date (expected to be approx. Rs 25 crore), taking the total expected consideration to Rs 873.5 crore. The 43 MW Power Division is being sold at Rs 66.9 crore.
The company periodically reviews its business strategy and as a part of that, has decided to focus on its core assets and look at strategic options for non-core assets, so as to keep its operations asset-light. PCMD and 43 MW Power Division have been identified as noncore assets and the company has entered into agreements to divest these. By selling these divisions, the company is expected to move towards an asset-light model, thus achieving improvement in its profitability ratios and return ratios. Further, the transaction will strengthen the balance sheet by providing significant liquidity to the company and deleveraging the balance sheet, Welspun Corp said.
On a consolidated basis, net profit of Welspun Corp declined 54.69% to Rs 30.08 crore on 13.41% rise in net sales to Rs 2528.85 crore in Q3 December 2018 over Q3 December 2017.
Welspun Corp is among the largest welded line pipe manufacturing companies in the world.
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