Sundram Fasteners shares soared as much as 10 per cent in the early trade on Thursday after the company announced that it has restructured its international operations to maximise revenue potential and shareholders’s value. It has created a new subsidiary called Sundram International Ltd, based in United Kingdom.
At 9.44 am, shares of Sundram Fasteners were trading 7.65 per cent up at Rs 178. The scrip opened at Rs 165.10 and has touched a high and low of Rs 182 and Rs 165.10, respectively, in trade.
Later, the scrip closed 0.60 per cent up at Rs 166.35.
In a BSE filing, the company said, “The Chinese company Sundram Fasteners (Zhejiang) Ltd and the UK subsidiary Cramlington Precision Forge Ltd have become subsidiaries of Sundram International Ltd. Both these companies are profitable and have been paying consistent dividend to the parent company”
The new company Sundram International Ltd will be used as a vehicle, as and when the opportunity arises, to acquire technology aborad, a BSE filing by the company said.
As part of restructuring, Sundram Fasteners has divested the German subsidiary Peiner Umformtechnik and its affiliates. The German subsidiary has been impacted adversely since the recession of 2008 and has not been performing to the expectation of Sundram Fasteners.
“We are confident that the divestiture of the German subsidiary will go a long way in strenghtening the balance sheet of Sundram Fasteners and improving shareholder’s value in Sundram Fasteners Ltd,” the company said.
For the quarter ended December 2015, the company reported net profit of Rs 41.75 crore, up 38.57 per cent, against Rs 30.13 crore in the same quarter last year.
In the past one year, the share price of the company plunged 14.30 per cent to Rs 165.35 till April 6, whereas BSE Sensex slid 12.64 per cent during the same period.
Sundaram Fasteners is a flagship company of the TVS Group.