Escorts Kubota Amends Agreement For Rs 1,600-Crore Sale Of Railway Equipment Division To Sona BLW

Escorts Kubota Ltd. has entered into an amended and restated business transfer agreement with Sona BLW Precision Forgings Ltd. for the sale of its railway equipment division.

The revised agreement modifies certain terms of the initial BTA signed on Oct. 23, 2024, including changes related to a portion of the Rs 1,600-crore consideration being placed in escrow and released in tranches upon the completion of specific milestones, as per an exchange filing.

The company had earlier approved the sale of its RED Business, engaged in manufacturing, assembly, sales, servicing and R&D of railway equipment, as a going concern on a slump-sale basis.

While the amended and restated BTA replaces the initial agreement, the overall transaction remains subject to the fulfillment of conditions precedent and closing actions, as per the filing.

The company has also approved that the lumpsum cash consideration will be subject to certain transaction adjustments as specified in the revised agreement.

Additionally, the board of directors have approved the appointment of B. Govindarajan as the managing director of Eicher Motors. Govindarajan to continue as the CEO of Royal Enfield.

Shares of Escorts Kubota closed 0.93% higher at Rs 3,300 apiece, compared to a 0.76% decline in the benchmark Nifty. The stock rose 17.55% in the last 12 months.