Welspun Corp stock soars 9% after announcing value unlocking

The company announced value unlocking of ~Rs940cr through the divestment of its Plate and Coil Mill Division (PCMD) and its 43 MW Power Division.

Apr 01, 2019 06:04 IST India Infoline News Service

Welspun Corp
Shares of Welspun Corp soared 9% on Monday’s trade after the company announced value unlocking of ~Rs940cr through the divestment of its Plate and Coil Mill Division (PCMD) and its 43 MW Power Division. The stock is among top gainer on the Nifty metal index.
The sale consideration for PCMD is Rs848.5cr, and closing adjustments pertaining to Net Current Assets as of Closing Date (expected to be ~Rs25cr), taking the total expected consideration to Rs873.5cr, the company said in the BSE filing. 
The 43 MW Power Division is being sold at Rs66.9cr, the company added.
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.
Welspun Corp Ltd is currently trading at Rs147.55, up by Rs11.9 or 8.77%, from its previous close of Rs135.65 on the BSE. The scrip opened at Rs141.80 and has touched a high and low of Rs149 and Rs141.80, respectively.

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