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PRESS
RELEASE
12 June
2008
Grasim
to hive off its sponge iron business
Grasim
Industries Ltd., a flagship company of the Aditya Birla Group,
today announced the hiving off of its sponge iron business by
way of a slump sale for a purchase consideration of Rs. 1,030
crore. The transaction was approved by the board of directors
of Grasim at its meeting held today.
Under
a court approved Scheme of Arrangement, Grasim would transfer
its Vikram Ispat undertaking (Sponge iron business) into a
new special purpose vehicle (SPV), to be formed as a subsidiary
company of Grasim for this purpose, which would be funded
by Welspun Power and Steel Limited (“Welspun”),
through equity investment and induction of debt to acquire
the SPV and sponge iron business. The SPV will use the funds
so inducted by Welspun to make the payment of consideration
to Grasim.
The transaction
is expected to be completed within the next six months.
The sponge
iron business is run under the name of Vikram Ispat. Commissioned
in 1993, Vikram Ispat operates as a division of Grasim. The
plant is situated in the Raigad district of Maharashtra. Vikram
Ispat generated a sales turnover of Rs. 950 crore during the
financial year ended 31 March 2008.
Welspun
is a closely held unlisted company having its registered office
in Gujarat. It manufactures sponge iron at its plant situated
at Anjar, Gujarat.
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