Stake-sale funds will clear debt, boost biz: Ammann Apollo

Anand Patel, CEO, Ammann Apollo India says, in an interview on CNBC-TV18, that the proceeds from the sale of 70-percent stake in its subsidiary Apollo Construction Equipment Limited (ACEL) to Switzerland-based Ammann Group will be used to build the company’s crushing and screening equipment.
  • Language
  • App
  • Subscriptions
  • Specials
  • Sign-In
  • Register
GeStepAhead GrowMyMoney IThe Winning Leap Tech Control
Moneycontrol

Home » News » Business

Apr 11, 2013, 10.59 PM | Source: CNBC-TV18

Stake-sale funds will clear debt, boost biz: Ammann Apollo

Anand Patel, CEO, Ammann Apollo India says, in an interview on CNBC-TV18, that the proceeds from the sale of 70-percent stake in its subsidiary Apollo Construction Equipment Limited (ACEL) to Switzerland-based Ammann Group will be used to build the company’s crushing and screening equipment.

Like this story, share it with millions of investors on M3

Stake-sale funds will clear debt, boost biz: Ammann Apollo

Anand Patel, CEO, Ammann Apollo India says, in an interview on CNBC-TV18, that the proceeds from the sale of 70-percent stake in its subsidiary Apollo Construction Equipment Limited (ACEL) to Switzerland-based Ammann Group will be used to build the company’s crushing and screening equipment.

Post Your Comments

Share Cancel

Anand Patel (more)

CEO, Ammann Apollo India |

Gujarat Apollo deals in crushing and screening equipment and the funds will be used to tap opportunities in the mining sector

- Anand Patel (CEO)

Anand Patel, CEO, Ammann Apollo India says that the proceeds from the sale of 70-percent stake in its subsidiary Apollo Construction Equipment Limited (ACEL) to Switzerland-based Ammann Group will be used to build the company's crushing and screening equipment for the mining sector.

Speaking to CNBC-TV18, Patel adds that the remaining 30-percent stake will be held by the company and the proceeds of the transaction will result in the company being debt-free.

Below is the edited transcript of the interview on CNBC-TV18

Q: Can you explain the details of the sale where you sold a 70-percent stake in one of your subsidiaries for Rs 280 crore? What was the reason for the sale? What are you planning to do with the proceeds of the sale?

A: Gujarat Apollo Industries Limited has a subsidiary named Apollo Earthmovers Limited (AEML) which in turn has a subsidiary called Apollo Construction Equipment Limited (ACEL) and is a wholly-owned subsidiary. It is in this subsidiary that Switzerland-based Ammann Group has invested for a 70-percent stake. The remaining 30 percent will be owned by a subsidiary of Gujarat Apollo.

Q: Will this reflect in your profit and loss (P&L) statement?

A: Yes, since this is a minority shareholding in the operating company it will not be reflected in the P&L statement or balance-sheet. It will be as an investment and all the income as dividend will be reflected in the balance-sheet.

Q: The market cap of the company is Rs 180 crore and this deal is worth Rs 280 crore. Can you explain the contours of the deal? Is it all-cash deal? What is the current situation of the debt and will any of the proceeds be used to service debt?

A: Thanks to the all-cash deal, Gujarat Apollo will not have any debt left. The business was sold from two of the Apollo companies Gujarat Apollo and Apollo Earthmovers. Gujarat Apollo, which is a listed entity, is to receive funds to the tune of about Rs 240 crore through the sale of the business from Gujarat Apollo to the Apollo Construction Equipment

Q: By how much does your debt reduce?

A: To start with, we did not have any long-term debt. The Gujarat Apollo board will decide how to deploy the funds in terms of improving the valuation for shareholders and stakeholders.

Q: When does the name of this listed entity change?

A: No, the name of the listed entity doesn't not change. 

Q: What will the cash be used for?

A: Gujarat Apollo deals in crushing and screening equipment and the funds will be used to tap opportunities in the mining sector.

Q: In your previous announcement of earnings, revenues stood at Rs 65 crore. By how much will your annual revenues fall due to the sale?

A: The last reported annual revenue was about Rs 200 crore. The quarterly revenue stood at Rs 60 crore and post this deal, revenues are likely to be at Rs 25-30 crore.

Buy, Hold, Sell ? Hear it first on M3
Stake-sale funds will clear debt, boost biz: Ammann Apollo

See all

Get started using your favorite social network

or

Login using moneycontrol ID

Username
Password

Need help logging in? Reset password.

Don´t have an account? Sign Up

Get started using your favorite social network

or

Simply sign up using this short form

* mandatory

UserName*

Username should be atleast 4 character

Password*

Password should be 8 or more characters,
atleast 1 number, 1 symbol & 1 upper case letter

Alert

Your Password should contain
  • 8 or more characters
  • At least 1 number
  • At least 1 symbol
  • At least 1 upper case letter
Confirm Password*
Email
Already have an account? Login