GE T&D India has completed the sale of the Global Engineering Operations Division (GEOD), the company said in a stock exchange filing.
In a brief communication, GE T&D India said that it completed the sale of the Global Engineering Operations Division (India for Global) to GE India Industrial Pvt Ltd, on March 31, 2022.
In January 2022, GE T&D India had announced that the company’s board agreed to sell the company’s Global Engineering Operations Division to group company GE India Industrial Pvt Ltd (GEIIPL), on a slump sale basis.
The Global Engineering Operations Division (India for Global), known as the “GEOD Business”, was to be sold to GEIIPL, on “as is where is” basis for a consideration of Rs.140.60 crore.
The sale was expected to be completed by March 31, 2022, with the business transfer agreement expected to be executed by January 31, 2022.
It may be mentioned that business activities of GEOD Business were “non-core” to GE T&D India. During FY21, the sales turnover of the GEO Business was Rs.72.57 crore, which was less than 2.2 per cent of the total sales turnover of GE T&D India.
Rationale for sale
- The GEOD Business was mainly entrusted with short term, non-exclusive contracts and purchase orders for global engineering services with other companies in the GE Grid Solutions division, outside India.
- On April 30, 2021, GE T&D India announced to stock exchanges that it was formally notified by GE Grid Solutions that effective June 30, 2021, no new contracts/purchase orders will be issued to the GEOD Business, and that existing contracts/purchase orders would lapse at their expiry date or would be terminated by notice. This deadline of June 30, 2021 was extended first to December 31, 2021 and later to March 31, 2022.
- The main impact of this decision by GE Grid Solutions would be that there would be no service assignments in the GEOD Business, resulting in excess manpower at GE T&D India. This is more so because the workforce of the GEOD Business has specialized skill sets due to which the employees could not be absorbed in other departments/functions of GE T&D India.
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- GE T&D India had therefore decided to sell off GEOD to GEIIPL for an amount of Rs.87.30 crore. However, a certain section of shareholders of GE T&D India did not approve of this sale and the proposal did not fructify at that time.
- After extensive discussions, GE Grid Solutions, in January 2022, agreed to acquire the GEOD Business on a slump sale basis through GEIIPL. This formed the basis for the eventual sale as discussed in this story.
Featured photograph (source: ge.com) is for representation only
