Texmaco Rail to acquire 76% Stake in Bright Power

Kolkata (KOAA): Shares of Texmaco Rail gained over 9 per cent in morning trade after the company said its board has approved acquiring a 76 per cent majority stake in Bright Power for Rs 100 crore. The stock hit a high of Rs 114, up 9.03 per cent, on the BSE in morning trade. “The duly-empowered Committee of Board of Directors of the company at its meeting held on September 14, 2015 has approved the execution of a non-binding term-sheet with promoters of Bright Power Projects (India) for the acquisition of majority equity share capital (76%) of Bright Power at an enterprise value of about Rs 100 crore,” the company said in a filing to BSE.

The objective of acquisition of shares of Bright Power by the company is to enter into OHE Rail Sector which will enable the company to strengthen its positioning as a total rail solution provider company, the statement added.  The acquisition will be funded through internal accruals of the company, it said.

The final transaction is expected to complete in two-three months, subject to certain approvals/conditions and due diligence, with definitive documentation expected to be executed between the parties within next 45 days, the company said.

Texmaco Rail & Engineering is a multi-discipline engineering and infrastructure firm with 5 manufacturing units in Kolkata.

The company has recently raised Rs 300 crore through as qualified institutional placement. The final transaction is expected to be completed over the next two-three months.

“Texmaco expects this acquistion to be strategic and complimentary to the existing operations of Kalindee Rail. Bright Power has a turnover of about Rs 80 crore in 2014-15 with double-digit operating margins and healthy order book of Rs 200 crore as on April 1, 2015. It has recently won two major tenders aggregating to about Rs 100 crore,” Texmaco said in a statement today.

The Twelfth Five-Year Plan (2012-17) had set a railway electrification target of 6500 km. The company said around 39.9 per cent of the railways had been electrified.

“The current annual run rate of electrification is 1300-1400 km on the existing railway network,” the company said.

ICICI Securities was the financial adviser and Shardul Amarchand Mangaldas & Co the legal council to Texmaco for this transaction.