Prakash Steelage completes JV agreement with Tubacex SA Spain

MUMBAI: Stainless steel tubes and pipes manufacturer Prakash Steelage today said Spain's Tubacex SA has completed acquisition of a majority 67.5 per cent stake in its seamless stainless steel tubes division.

Prakash Steelage had entered into a joint venture (JV) agreement with the Spanish stainless steel maker in February, 2015.

Following the JV agreement, Prakash Steelage transferred the seamless stainless steel tubes and pipes division to Tubacex Prakash India Pvt Ltd and retained 32.47 per cent stake in the said company, Prakash Steelage said in a statement here.

The company has reported a smooth and successful completion of the entire transaction as per the terms of the said JV agreement and the the Business Transfer Agreement (BTA) thereafter.

The company said it has utilised the consideration of Rs 209.16 crore, of which Rs 206.01 crore went towards the repayment of bank debts, creditors of seamless division and deal expenses and Rs 3.15 crore towards investment in equity share capital in the JV company, the release said.

The Board of Directors of the company at its meeting, approved several proposals for approval of members through postal ballot.

The Board also approved splitting (sub-division) of equity shares of the company from the face value of Rs 10 per share to Re 1 per share.

Post the transaction, Prakash Steelage will continue to own and operate all its other businesses, including its trading activity in stainless steel products, it said.