McNally Bharat Engineering (MBE) Company Ltd's Singapore-based subsidiary MBE Mineral Technologies Pte Ltd has offloaded its entire holding of 41.66 per cent in AIM-listed engineering and manufacturing group Hayward Tyler Group Plc UK for £12.4 million ($20.5 million), according to a stock market disclosure.
"The stated sale of investment in Hayward Tyler has yielded a tax free profit in its Singapore subsidiary of $2.5 million (approximately), which shall be reflected in the consolidated accounts of MBE for 2013-14,” Deepak Khaitan, executive chairman of Kolkata-headquartered MBE, said.
Shares of MBE, an engineering firm that provides turnkey solutions in the areas of power, steel, aluminium, etc., rose over 5 per cent in intra-day trades over the news and closed the day at Rs 54.15 a unit on the BSE, an increase of 1.98 per cent, in a flat Mumbai market on Wednesday.
The proceeds from the sale of stake will be utilised to bring down the overall debt of MBE Mineral by around Rs 140 crore and will also help in reducing the contingent liability of corporate guarantee given for the loans being paid back to the extent of around Rs 130 crore, the company statement said.
Once the transaction is completed, MBE will focus on the Indian business, which is expected to record a turnover of Rs 2,750 crore in fiscal 2014-15, with an expected opening order book of over Rs 6,500 crore or little over $1 billion.
Moreover, MBE's Coal & Mineral Technology Group based in Germany and South Africa are expected to witness an improved performance in 2014-15 with an expected opening order book of over €40 million, it added.
MBE, through its another subsidiary MBE Mineral Technology Pte Ltd, had acquired the coal & mineral technology division of KHD Humboldt Wedag, a global leader in coal and mineral processing, back in 2009. MBE also has a third subsidiary – EWB, Hungary.