Govt of Italy to acquire 30.30% strategic stake in Titagarh Wagons' Italian subsidiary; stock spurts ~4%

12 Sep 2022 , 09:15 AM

Titagarh Wagons Limited (TWL) notified all stakeholders that the Government of Italy, through its investment arm – Invitalia, has acquired a strategic position in Titagarh Firema Spa (TFA), the subsidiary of Titagarh Wagons Limited, in a key milestone transaction.

The Italian government will thereafter control 30.30% of Titagarh Firema for an investment of Euro 10 million.

Their investment was followed by an investment from Hawk Eye DMCC, a private equity fund located in the UAE. It spent Euro 4.5 million and purchased 13.64% of the Company’s equity share capital.

As part of the investment agreement and recapitalization plan negotiated by TFA with the Government agency and the Private Equity fund, the company’s current promoters and owners (Titagarh Bridges & International Pvt Ltd) have also invested Euro 5.4 million.

The fresh equity was issued at face value of Euro 1 per share, resulting in a business Enterprise Value of Euro 118 million and an equity valuation of Euro 33 million.

This is a strategic transaction, and the recapitalization process will result in overall value creation and an increase in TFA values. The Company, together with its subsidiary Titagarh Bridges & International Private Limited (TBIPL), continues to own shares worth Euro 16.40 million, accounting for 49.70% of TFA.

At around 9.18 AM, Titagarh Wagons was trading at Rs162.85 up by 4.06% from its previous closing of Rs156.50 on the BSE.

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