HSIL skyrockets 10% on transformation to a focused Packaging Company with divestment of Building Products Division

17 Jan 2022 , 09:16 AM

HSIL Limited, India’s leading packaging company, in its Board meeting held on Saturday approved the divestment of its Building Products division to Brilloca Limited, a wholly-owned subsidiary of Somany Home Innovation Limited (SHIL) in a slump sale transaction for a cash consideration of Rs630cr.

The company stock started on a bullish note on Monday. Ata round 9.20 am, HSIL Ltd was trading at Rs257.10 per piece up by Rs23.75 or 10.18% from its previous closing of Rs233.35 per piece on the BSE.

The scrip opened at Rs249.25 and has touched a high and low of Rs267.65 and Rs249.25 respectively.

With the proposed transaction, the Building Products division’s entire operating facilities of HSIL will be transferred to Brilloca.

• Cash proceeds of Rs630cr will be utilized towards the pre-payment of existing bank borrowings which will further strengthen the HSIL balance sheet and create capital to further expand its packaging business.
• Going forward, HSIL will completely focus on the expansion of its packaging business and capitalize on both organic and inorganic opportunities.
• E&Y acted as the structuring advisor and Deloitte as the independent valuer
• The transaction is subject to shareholder and other statutory approvals as applicable. The transaction is expected to close by 31st March 2022 or such date as mutually agreed between HSIL and Brilloca.

Rajendra Kumar Somany, Chairman and Managing Director, HSIL: “This transaction will have a transformative impact on the market positing and growth prospects of HSIL. The company will emerge as a focused packaging company, well-positioned to implement its strategic plans to drive the packaging business and continue to unlock value for all stakeholders. The cash proceeds will be used to pre-pay existing bank borrowings and increase cash reserves.”