Diamond Cables to acquire strategic stake in Apex Group

Diamond Cables Ltd has announced that the Company has entered into an agreement to acquire a strategic stake in Apex group comprising of Apex Electricals Ltd, Amod Industries Ltd, Sarjak Electricals Ltd, Sheetal Cables and Conductors Pvt Ltd, from the existing promoters the Sanghavi family.

The promoters of Apex Group are in the process of arriving at a settlement with its secured lenders, workers for their outstanding liabilities for which funding shall be required, on approval of the scheme of revival by BIER, The secured lenders and banks aggregating Rs 71 Crore have settled their dues at 15% of principle amount waiving all interest. The Appellate Authority for Industrial & Financial restructuring has by order remanded the case of Apex Electrical Ltd to BIRR for considering the relevant aspects including the pay ability of unsecured creditors and other dues, for which a scheme is to be submitted in next 15 days.

Apex group was one of India's largest and oldest Power Transformer manufacturers with an Installed capacity of over 7500 MVA. Apex Electrical Ltd had grown to be amongst the key players manufacturing a wide range of large power transformers in voltage class upto 220 MVA. The Company which has an installed capacity of 7500 MVA had a market share of over 33% in 2002 in the 100MVA class transformer in the country. The Company was in operation with Technical Collaboration with Elin Tranformatoren GmbH, Austria. The Companies Peak production in one single year during its operation stood at 7000 MVA. The Company had successfully diversified into Instrument Transformers (upto 220 kV Current Transformers & 36 kV Potential Transformers), Switchgears (12.5 kV Indoor & Outdoor Vacuum Circuit Breakers), Bus Ducts (upto 12.5 kV).

The agreement also includes the takeover of asset and settlement of dues of Amod Industries Ltd, Distribution Transformers manufacturers having an installed capacity of over 15,000 Distribution Transformer of assorted rating post settlement of its liabilities the said Company is proposed to be merged with Apex Electricals Ltd. The Transaction also provides for merger of Transformer component manufacturing Companies Sarjak Electrical Ltd (CRGO Manufacturer) and Sheetal Cables and Conductors Pvt Ltd (Copper Wire Manufacturer) by Apex Electrical Ltd.

The entire facility of Power Transformers, Distribution Transformers, CRGO making and wire making facility shall be consolidated in APEX Electrical Ltd having facilities at Samliya-Baroda, Amod-Bharuch and Meghnagar in MP over and above the Company's existing facility at Western Transformer in Ranoli-Baroda.

With this strategic investment the Company which proposes to be key player in Power Infrastructure and Equipments Industry in India has Investments in an aggregate Annual capacity of 12500 MVA in Transformers, 50500 MT in Conductors, 5500 Kms in Power Cables. Post expansion of Cables facility in DCL an capacity of 10000 kms of LT Cables and HT Cables facility upto 132 KV shall be added before December 31, 2007. These Investment along with a Substantial stake in the EPC business shall make the Company strong in the long term.

Source : Equity Bulls

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