L&T to sell subsidiary EWAC Alloys for Rs522 crore
Mumbai: Engineering major Larsen and Toubro Ltd (L&T) on Wednesday announced the sale of unlisted subsidiary EWAC Alloys Ltd as part of its strategy to exit non-core businesses.
In a stock exchange filing, Larsen and Toubro said it has entered into a definitive agreement with ESAB Holdings Ltd, a company registered in the UK, to sell EWAC Alloys for Rs522 crore.
EWAC makes welding products and provides related services. The company, which began as a joint venture of Larsen & Toubro and Germany-based Messer Eutectic Castolin Group, became a wholly owned subsidiary of L&T in 2011.
L&T said EWAC had a revenue of Rs211.2 crore in fiscal 2017, representing around 0.19% of the L&T group’s consolidated revenue. As of 31 March, it had a net worth of Rs95.69 crore.
“Subject to customary closing conditions, the sale is expected to be completed within 90 days from the date of execution of the share sale and purchase agreement,” the statement added.
On Wednesday, shares of L&T dropped 0.83% to close at Rs1,133.3 on BSE, while the benchmark Sensex lost 0.28% to 31,833.99 points. The announcement came after market hours.
The acquirer ESAB offers a huge range of products and solutions for welding and cutting process.
In 2012, ESAB was acquired by Colfax Corp., a diversified industrial manufacturing company based in the US.
In August, L&T agreed to sell its entire stake in unlisted unit L&T Cutting Tools Ltd to IMC International Metalworking Companies BV, owned by Berkshire Hathaway Inc., for Rs174 crore.
L&T was also in talks with ABB, the European engineering multinational, to sell its electrical and automation division, The Economic Times reported on 21 June. L&T has operations in engineering, construction, manufacturing, technology and financial services