Elgi Equipments Sells Stake in US Joint Venture for $154K

28 Sep, 2024

Elgi Equipments Sells Stake in US Joint Venture for $154K

Elgi Equipments Ltd, a leading manufacturer of air compressors, has announced its decision to divest its entire stake in the Compressed Air Solutions of Texas LLC (CAST) joint venture. The announcement was made during a board meeting held on September 25, 2024. The divestment, executed by its wholly-owned subsidiary, Elgi Compressors USA Inc, is expected to bring in a consideration of $154,586.

The sale will be made to the existing joint venture partner, aligning with the terms of the operating agreement signed in March 2020 and amended in October 2020. The formal closure of the transaction is anticipated by October 31, 2024. This move reflects Elgi USA's strategy to streamline its operations and focus on core business areas.

In addition to the financial aspect, this divestment allows Elgi Equipments to regain the exclusivity for oil-flooded rotary screw air compressors in key Texas counties. The joint venture partner involved in this transaction does not belong to Elgi Equipments' promoter or group companies, ensuring an independent transition. This strategic decision highlights Elgi Equipments' commitment to adapting its business model to meet market demands and enhance operational efficiency.