Welspun Expands its Plastic Products Business through 1,251 Cr. Strategic Acquisition of Sintex-BAPL
Welspun Corp. Ltd. (WCL) stated in a stock filing dated 29th March 2023 that it has acquired Sintex-BAPL Ltd. (SBAPL) for Rs. 1,251 crore.
This acquisition entails the amalgamation of Mahatva Plastic Products Pvt. Ltd., a wholly-owned subsidiary of Welspun Corp., with Sintex-BAPL.
Welspun Corp’s Subsidiary Merges with Debt-laden Sintex-BAPL
Sintex-BAPL had been admitted to the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC) in December 2020.
As on 29th March 2023, Welspun has completed the acquisition of SBAPL through its unlisted subsidiary, Mahatva Plastic Products Pvt. Ltd. This subsidiary of WCL had been incorporated on 13th August 2021 specifically for Sintex-BAPL’s acquisition.
The resolution plan for this process had been submitted by a consortium of Propel Plastic Products Pvt. Ltd., which is a 100% subsidiary of WCL, and Plastauto Pvt. Ltd., which is a related party of WCL. Subsequently NCLT, Ahmedabad approved this resolution plan on 17th March 2023.
WCL has stated in its stock filing dated 29th March 2023 that its board has approved this merger in accordance with the aforementioned resolution plan.
For the purpose of this merger, Propel Plastic Products has paid Rs. 1,251 crore in the form of cash to the creditors of SBAPL. Subsequently, shareholders of Propel have been allotted equity shares in SBAPL.
Therefore, as of 29th March 2023, SBAPL has become a subsidiary of Welspun Corp. Ltd.
SBAPL Transfers its Auto-Business to Plastauto for Rs. 110 Cr.
As per the aforementioned resolution plan for the amalgamation, Sintex-BAPL’s reconstituted board has executed a Business Transfer Agreement (BTA) with Plastauto on 29th March 2023. Under this BTA, SBAPL’s auto business has been transferred to Plastauto for a sum of Rs. 110 crore.
Sintex-BAPL’s auto business comprises the manufacturing of plastic-moulded components for two-wheeler and four-wheeler automobiles.
Moreover, SBAPL had constituted a joint venture with Italy’s Rototech Group, namely BAPL Rototech Pvt. Ltd., for the purpose of producing Plastic Fuel Tanks, Diesel Exhaust Fluid (DEF) tanks (Ad-blue), filler pipes for fuel tanks, and engine functional parts. As per the aforementioned BTA, Plastauto has also acquired the investment of SBAPL in this joint venture.
Welspun on Track to Expand its Building Materials Portfolio & Ground Presence
Welspun stated in its stock filing that acquisition of Sintex-BAPL is a ‘strategic’ step towards materialising its expansion into the building materials space. The company explained that Sintex is a household name in the domestic water storage tank business, and therefore has a strong consumer base.
Commenting on this acquisition, Welspun Corp.’s Chairman, Mr. Balkrishan Goenka said, “As we strengthen our building material portfolio and envision a strong domestic footprint with our diverse businesses, Sintex acquisition is a strategic addition to strengthen our consumer connect and on ground presence. Sintex brand is synonymous to the category and is known for its legacy of quality products”.
About Sintex-BAPL Ltd.: Pune-based Sintex-BAPL Ltd. deals in the manufacturing of plastic products such as water storage tanks, and injection moulded plastic automotive components. The company’s consolidated turnover for 2021-22 was Rs. 934 crore.
About Welspun Corp. Ltd.: Welspun Corp. Ltd. is the flagship company of Welspun Group. WCL provides solutions for projects like oil and gas pipelines. For FY-22, the company reported a consolidated turnover of Rs. 6,505.11 crore.