In line with its strategy to divest non-core businesses, heavy engineering major Larsen and Toubro (L&T) sold its entire stake in wholly owned subsidiary EWAC Alloys to UK-registered ESAB Holdings for total consideration of Rs 522 crore, the company informed the stock exchanges on Wednesday.
EWAC Alloys’s total revenues were Rs 211.20 crore and the company accounted for 0.19% of the total consolidated revenue of L&T for the full year ended March 31, 2017. The company’s net worth was Rs 95.69 crore, according to the BSE notice.
“The share purchase agreement has been executed on October 11, 2017. Subject to customary closing conditions, the sale of shares is expected to be completed within 60 days from the date of execution of the share purchase agreement,” the company said in the filing.
Share price of L&T on Wednesday closed down 0.83% at Rs 1,133.30 on the BSE. The notice on the sale came to the exchanges post market hours.
In an interview to FE in April on the company’s plans of streamlining various non-core businesses of L&T, CEO and managing director SN Subrahmanyan had said the company identified some of the key growth businesses to focus on. They include IT, technology services, defence, smart world and water management. “Non-core businesses will be exited over a period of time. So, like it has been said there is a strategic plan that involves re-allocation of resources of both talent and capital,” he had said.
EWAC is engaged in manufacturing of special welding electrodes, gas brazing rods and fluxes, welding torches and accessories, atomised metal powder alloys, flux cored continuous wires & wire feeders, polymer compounds and wear resistant plates. It had started as a joint venture of L&T and Messer Eutectic Castolin Group, Germany. The foundation of the eutectic division was laid in India in 1962.
The company, which has more than 50 years of experience in preventive maintenance and repair of industrial machinery, became a 100% subsidiary of L&T in 2011.
ESAB is a global major in production of welding and cutting equipment and consumables. The company offers products and solutions for welding and cutting process and application for industries such as automotive general fabrication and civil construction, power generation, repair and maintenance, shipbuilding and offshore, transport and mobile machinery, among others.
Last month, L&T said it had agreed to sell its 100% stake in the unlisted arm L&T Cutting Tools to Berkshire Hathaway-owned IMC International Metalworking Companies for Rs 174 crore.