Welspun promoters buy German partner Mulheim Pipe Coatings’ stake in Welspun Corp for $12M

BK Goenka-led promoter group of Welspun has acquired entire equity stake held by foreign partner Mulheim Pipe Coatings in the group flagship Welspun Corp for Rs 70.46 crore (nearly $12 million), according to a stock market disclosure.

Two promoter entities Welspun Infra Developers and Welspun Fintrade bought 3.12 per cent stake held by Mulheim Pipe, formerly Eupec Pipe Coating GmbH, in Welspun Corp at Rs 85.25 a share through block deals, the company said in a filing.

As on March 31, 2014, promoters held 38.21 per cent equity stake in Welspun Corp, the flagship company of Welspun Group, partly owned by the German partner.

Early this year Welspun Corp demerged its steel, oil & gas exploration, energy and infrastructure businesses into a separate firm Welspun Enterprises, which will be separately listed. This has made Welspun Corp a focused pipe manufacturer.

Private equity firm Apollo Global holds 13.3 per cent stake in the company, while the remaining is held by other shareholders.

Apollo Global had invested $350 million last year in two group companies – picking minority stake in the group’s flagship Welspun Corp Ltd (for $290 million) and Welspun Maxsteel Ltd (for $60 million).

It had also proposed to invest separately in the group’s infrastructure business, but that did not happen. Apollo later also sold its stake in Welspun Maxsteel to the local promoters.

Shares of Welspun Corp were trading at Rs 98 a piece, up 13.82 per cent from its previous close on the BSE in the flat Mumbai market.

The Welspun group has diversified businesses and it has multiple firms many being listed companies such as a part of the infrastructure business housed under Welspun Infratech (it owns majority stake in the public-listed Welspun Projects Ltd).

The group also has a separate listed textile firm called Welspun India, a filament yarn producer Welspun Syntex and Welspun Investments & Commercials, which is into a combination of trading activities and an investment holding business.

(Edited by Joby Puthuparampil Johnson)

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