JSW Steel Ltd. has accomplished the acquisition of Welspun Corp’s high-grade steel and coil business, after two years of settlement of the deal.
According to Welspun’s filing on the exchanges, the transfer was completed on March 31, 2021. Under the business transfer agreement, Laptev Finance Pvt.—a JSW Group firm—will acquire Welspun’s plates and coil mill division for a consideration of Rs 848.5 crore subject to closing adjustments towards net working capital.
The group company will then transmit all rights and obligations related to the deal on an arm’s-length basis to JSW Steel for a consideration of
Rs 1 crore. The consideration amount, which is signed to be in cash, will be paid on a deferred basis, subject to Welspun fulfilling certain regulatory approvals and payment milestones as provided under the business transfer agreement. As a part of the transaction, JSW Steel shall also buy a parcel of land from Welspun Steel for Rs 1.50 crore.
Welspun on March 31, 2019, declared the sale of its plate, coil mill and power divisions as it looked to divest its non-core assets to pare debt. While Welspun would sell its plate and coil mill division to Laptev Finance, subject to endorsement from the Competition Commission of India, the power division, comprising 43 megawatts in generation capacity, would be sold to a group entity, Welspun Captive Power Generation.
The competition regulator approved the offer in November that year.
The plates and coil mill division will be of strategic importance for JSW Steel to enlarge its value-added and special products portfolio, particularly plate mills in which the firm has so far not been present, the steelmaker said in a separate filing.
The turnover of the plates and coil mill division stood at Rs 539.90 crore in the fiscal ended March 2020 compared with Rs 1545.6 crore a year ago, JSW Steel’s filing stated.
Shares of JSW Steel were trading 8.22% higher as of 12:15 p.m. on Thursday compared with a 0.43% gain in the Nifty 50.