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30. April 2019

IN - Texmaco to buy steel foundry in Chattisgarh

Acquisition to be funded via internal accruals, bank loans


Texmaco Rail & Engineering, a part of Saroj Poddar-led Adventz Group, will acquire a steel casting foundry from Simplex Castings Ltd at an estimated investment of ₹87.50 crore.

Located at the Urla Industrial Estate in Raipur, Chattisgarh, the foundry will be acquired as a going concern and on a slump-sale basis. Texmaco will fund the acquisition through a mix of internal accruals and bank loans, the company said in a notification to the BSE.

Post acquisition, Texmaco will see a 12,000 tonne addition to its existing capacity of 30,000 tonnes. Currently, around 60 per cent of the capacity of the company is being utilised. The acquisition is expected to complement the existing product range and cater to the increased demand, Texmaco informed the bourses.

According to Texmaco’s annual report for 2018, the steel foundry division accounts for over 14 per cent of the company’s total turnover, which stood at ₹931 crore for the year ended March 31, 2018. Apart from steel castings, the company is engaged in manufacture of rolling stock, hydro–mechanical equipment, rail EPC, bridges and other steel structures.

Board okays fund-raising

The Board has also approved a fund-raising of ₹200 crore by way of issue of equity shares through a rights issue. Another proposal for issuance of debt, quasi-debt and other convertible instruments for an amount not exceeding ₹300 crore by way of foreign currency convertible bonds (FCCBs) or other similar securities has also been approved.

Amalgamation scheme

Meanwhile, the Kolkata Bench of the National Company Law Tribunal (NCLT) has approved the amalgamation of Texmaco Rail & Engineering Ltd and Texmaco Hitech and Bright Power Projects.

In a statement to the stock exchanges in January last year, Texmaco had said its management had approved acquisition of 76 per cent stake in Bright Power Projects (India) Pvt Ltd, an EPC company specialising in overhead electrification solutions for the Indian Railways. It also serves diverse sectors such as power, utilities, petrochemicals, pharmaceuticals and real estate.

Under the scheme of amalgamation, shareholders of Bright Power will get 818 fully paid-up equity shares of ₹1 each of Texmaco Rail & Engineering against every 100 fully paid-up equity shares of ₹10 each of the company. The record date has been fixed at May 10.

Source: thehindubusinessline.com

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