Titagarh Wagons Limited (TWL) announced that the Government of Italy, through its investment arm – Invitalia has taken a strategic stake in Titagarh Firema Spa (TFA), the subsidiary of Titagarh Wagons Limited. Titagarh Firema was acquired by Titagarh group in 2015.
Government of Italy will subsequently own 30.30% stake in Titagarh Firema, for an investment of Euro 10 million. Their investment has been accompanied by an investment from a private Equity Fund based out of UAE, Hawk Eye DMCC, who has invested Euro 4.5 million and acquired 13.64% equity share capital of the Company. The existing promoters of the company and shareholders (Titagarh Bridges & International Pvt Ltd) have also invested Euro 5.4 million as a part of the investment agreement and recapitalisation plan agreed by TFA with the Government agency and the Private Equity fund. The new equity has been issued at face value of Euro 1/- per share translating into an Enterprise Value of the company at Euro 118 million and an Equity valuation of Euro 33 million, according to the statement.
This is a strategic transaction and this recapitalisation exercise will lead to overall value creation and resultant appreciation of the valuations of TFA. The Company along with its subsidiary Titagarh Bridges & International Private Limited (TBIPL) continues to hold shares worth Euro 16.40 million representing 49.70% of TFA, the statement said.
Umesh Chowdhary, Vice Chairman and Managing Director of Titagarh Wagons Limited said: “It is indeed a momentous occasion for Titagarh to have been trusted by a Sovereign who have agreed to join our venture as a minority shareholder. This equity infusion by Invitalia will not only help recapitalise TFA, it will also bring about great branding and strategic value addition. I thank them as well as the private equity fund for their trust and faith in our Italian venture. This investment will allow TFA to expand its business and achieve its target of reaching a production 20 EMU coaches per month and developing into a boutique and high-quality Italian coach producer for Italy and Europe. Both the companies would operate independently in their respective market bases since both the companies are completely self-sufficient and competent to cater to their market needs. Titagarh India has also set up a design and engineering centre in Hyderabad recently. However, both companies would continue to leverage and take advantage of the immense synergy that they offer to each other in terms of joint engineering and manufacturing taking advantage of the Italian design and styling and Indian competitive cost of production.”
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