Alstom Projects India Ltd's (APIL's) boiler assets are set to be demerged into a new entity.
This is part of a proposal by APIL's parent firm, France's Alstom Group, to form a joint venture with China's Shanghai Electric Group.
Under this, Alstom intends to spin off its boiler business into a new legal entity that will be held by the proposed joint venture firm.
The boiler assets held by APIL will be demerged into the new entity as part of the plan, subject to necessary corporate and regulatory approvals, APIL informed the bourses, quoting a communication it received from the Alstom Group.
“Alstom and Shanghai Electric Group have signed a letter of intent for the creation of Alstom-Shanghai Electric Boilers Company, a 50:50 joint company combining both partners' activity in the boiler market for power plants,” the statement said. The joint company would supply new boilers and spare parts for services.
In addition to the direct sales that the new entity would undertake in the international markets, Alstom-Shanghai Electric Boilers would be a “privileged supplier” to Alstom and Shanghai Electric for new equipment and spare parts to their respective turnkey and service businesses, it said.
The new company is to be registered in Shanghai, with its operational headquarters in Singapore. The joint company would be set up once the agreements between the two companies are finalised and upon the completion of the social and regulatory processes.
Alstom's global boiler business comprises manufacturing sites in Durgapur (India), Neumark (Germany), Chattanooga (US) and Wuhan (China), as well as engineering centres at Stuttgart (Germany), Ashby (UK), Massy (France) and Windsor (US).