KEC International Ltd has announced the transfer of its cables business to a subsidiary company.
In a stock exchange filing, KEC International said that it has executed a business transfer agreement (BTA), on December 30, 2024, to transfer the cables business of KEC International to KEC Asian Cables Ltd a subsidiary of KEC International) via slump sale, on a going-concern basis.
In consideration of the slump sale, KEC Asian Cables Ltd (KACL) will pay KEC International Ltd, a sum of Rs.125 crore, the filing said, adding that there will be no potential conflict of interest arising out of this BTA.
Incorporated on October 1, 2024, KEC Asian Cables Ltd is a subsidiary of KEC International Ltd. KEC International’s direct equity holding in KACL is 95 per cent. The rest is held by KEC Power India Pvt Ltd — a wholly-owned subsidiary of KEC International Ltd.
In a related development, the board of KEC International, also on December 30, 2024, approved an investment of up to Rs.118.75 crore in KEC Asian Cables Ltd by way of subscribing to the rights issue of KACL, in one or more tranches.
Similarly, KEC International would be investing up to Rs.6.25 crore in KEC Power India Pvt Ltd (KPIPL) by way of subscribing to the rights issue of KPIPL, in one or more tranches.
This investment will be made on or before December 31, 2024, KEC International said.
There will be no change in the equity stake of KEC International in KAPL and KPIPL, post the rights issue, as the rights issue would be made in proportion to KEC’s current holding.
Background
KEC International manufactures cables under the brand “Asian Cables” that was originally owned by 1959-incorporated Asian Cables, believed to the be the oldest power cable manufacturing company in India. In 1966, the RPG Group (owners of KEC International) took over Asian Cables. Later, in the 1980s, RPG Group established telecom cable manufacturing units at Mysuru (Karnataka) and Rae Bareli (Uttar Pradesh), in joint venture with the respective state governments. In 1996, Asian Cables and RPG Group’s telecom cable business was merged into a single entity called RPG Cables Ltd, which was eventually merged with KEC International Ltd in 2009.
Today, KEC International Ltd has two cable manufacturing units located at Vadodara (Gujarat) and Mysuru (Karnataka). Across these two units, KEC International has a wide product portfolio including power cables, instrumentation cables, optical fibre cables, jelly-filled telecom cables, railway contact wires, railway catenary wire and railway communication cables. (Background information sourced from kecrpg.com)
Also read: KEC wins Rs.1,700 crore 765kV transmission infra orders
Featured photograph is a file picture of KEC International’s power cable manufacturing unit at Vadodara in Gujarat.
