The board of directors of Siemens Ltd has approved the sale and transfer of its mechanical drives (MD) business for a consideration of Rs. 4.4 billion to Flender Drives Pvt Ltd, subject to adjustment for the change in net current assets and capital expenditure, after June 30, 2020, up to the date of actual transfer of the MD business. The consideration has been arrived at based on an independent valuation, recommended by the committee of directors and the audit committee.
The sale and transfer of MD business is as going concern and on a slump sale basis, with effect from January 1, 2021. The same is subject to receipt of requisite statutory and regulatory approvals, as applicable.
The MD business within Siemens Ltd achieved a revenue of Rs 6.838 billion for FY 2019 and had an operating loss of Rs 553 million.
Sunil Mathur, Managing Director & CEO, Siemens Ltd, said, “Potential growth in this business will require substantial Capex and there are no synergies with the existing businesses of Siemens Ltd. Keeping the interests of the shareholders in mind, the board of Siemens Ltd has approved the sale of this business to Siemens AG, which has also announced their intention to publicly list this business via a spin-off.”