Shares of Jain Irrigation Systems Ltd on Wednesday rose 17 per cent after the company said its global irrigation business will be merged with Temasek-owned Rivulis in a cash-and-stock deal, a move that will help the firm to reduce its consolidated debt.
The stock jumped 17 per cent to Rs 43.90 on the BSE.
At the NSE, it rallied 16.8 per cent to Rs 43.80.
Jain Irrigation Systems on Tuesday said its global irrigation business will be merged with Rivulis in a cash-and-stock deal, a move that will help the company to reduce its consolidated debt by Rs 2,700 crore or around 45 per cent.
Jain Irrigation’s global irrigation business has been valued at Rs 4,200 crore, of which Rs 2,700 crore will be used to repay its all overseas debt and Rs 200 crore will come to the parent company, its Managing Director Anil Jain told reporters.
In the merged entity, it will have a 22 per cent equity stake, while Rivulis will hold 78 per cent.
The deal is likely to be concluded in the next six months, he said, adding that the combined entity will have a revenue of USD 750 million.
At present, Rivulis has an annual revenue of USD 400 million, while that of Jain Irrigation’s global irrigation business is USD 350
million.
Jain Irrigation Systems Ltd’s wholly-owned subsidiary Jain International Trading and Rivulis have entered into definitive transaction
agreements.
