On June 29, leading global pipe manufacturer Indian-based Welspun Corp Limited (WCL) and certain of its affiliates announced that it has agreed to a transaction with one of the world's leading private equity firms, New York-based Apollo Global Management, LLC (Apollo). According to the agreement, Apollo will invest INR 13 billion ($0.28 billion) in Welspun Group. The transaction is expected to close on or before August 12, 2011.
The boards of directors of Welspun Corp Limited (WCL), Welspun Maxsteel Limited (WMSL) and Welspun Infratech Limited (WITL) have carefully considered and agreed to accept Apollo's investment proposals in meetings held on June 29, 2011, and these boards have universally viewed this transaction as a positive, landmark event in the trajectory of Welspun Group.
With this transaction, WCL has taken firm steps in the direction of becoming a more vertically integrated manufacturer in the oil and gas line-pipe industry and continues in the direction of accomplishing the ‘ore to pipes' vision of the company.
WMSL currently produces direct reduced iron (DRI) and is proposing to set up a 1.5 million mt per year high-end steel slab facility. This investment will enhance Welspun's already impressive capabilities to compete in the global oil and gas linepipe market. More specifically, it will enable the business to withstand underlying volatility in steel prices and deliver predictable business and optimal solution to customers.