Welspun Infra Projects, a subsidiary of Welspun Corp, has decided to exit from its joint venture with Leighton Group by selling its entire 39.88 per cent stake for a net cash consideration of $99 million (Rs 620 crore).
With the sale, the company will be renamed Leighton India. The transaction is expected to be completed in the first quarter of 2014.
Welspun Corp said the decision to exit the joint venture was taken to redirect efforts and reposition itself in the infrastructure space.
Welspun intends to use the proceeds to pay off its debt and de-leverage its balance-sheet. The Group intends to concentrate on core businesses which have potential to give it scale up substantially, it said.
In 2011, Welspun Corp acquired 35 per cent stake in Leighton Welspun India for cash consideration of Rs 470 crore, and subsequently, it acquired additional shares in a cashless transaction worth Rs 115 crore. Welspun then wanted to capitalise on opportunities in the Indian infrastructure sector, especially public-private partnership projects.
Welspun Corp is now into four business verticals including line pipes, energy, infrastructure and steel.
As part of reorganisation, Welspun Corp is in an advanced stage of de-merging parts of its business, other than line pipes into Welspun Enterprises through a court process.