Amarchand Mangaldas advised Grasim Industries, part of the Aditya Birla group, on the sale of its sponge iron business, Vikram Ispat, to Welspun Power and Steel for almost US$240 million.
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Grasim said it would transfer its Vikram Ispat undertaking into a new special purpose vehicle (SPV), to be formed as a subsidiary company of Grasim. The SPV would be funded by Welspun Power and Steel.
The SPV would use the funds inducted by Welspun to make the payment to Grasim. The transaction should be completed within six months.
Vikram Ispat is the largest merchant producer of sponge iron in India. Welspun Power and Steel is a Gujarat-based manufacturer of sponge iron, rebars and billets.
Grasim has said it plans to plough the money from the sale back into its core businesses of viscose-staple fibre and cement.
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