Welspun inks Rs 2,250-cr PE deal

Steel pipe manufacturer Welspun Corp said on Wednesday Apollo Global Management would invest Rs 2,250 crore ($500 million) in its parent company, as part of its strategy to boost its presence in the global oil and gas pipe market.

As part of the total investment plan, funds affiliated with Apollo will invest Rs 1,305 crore, of which Rs 788 crore will be invested through fully/compulsorily convertible debentures and Rs 517 crore through global depository receipts (GDR).

Board of directors of Welspun Corp and funds associated with Apollo have jointly agreed to buy founders' stake in Welspun Maxsteel Ltd (WML) for a total consideration of Rs 945 crore, it said.

Apollo also plans to invest Rs 675 crore in Welspun Infratech (WITL), a WCL subsidiary, the statement said.

The transaction is expected to close on or before August 12.

"The board of directors of Welspun Corp Limited (WCL), Welspun Maxsteel Limited (WMSL) and Welspun Infratech Limited (WITL) have carefully considered and agreed to accept Apollo's investment proposals in meetings held on June 29 and... Have universally viewed this transaction as a positive, landmark event in the trajectory of the Welspun Group," the company said in a statement.

The group intends to use the sale proceeds to scale up its businesses in infrastructure and energy space. While Welspun Corp has orders worth Rs 5,500 crore, Welspun Infratech, has an order book of Rs 600 crore.

Markets were emphatic about the deal and were up 3.8% at Rs 175 on Bombay Stock Exchange at 1200 hrs.