Titagarh Rail Systems Limited (TRSL) announced that its Italian associate, Titagarh Firema SpA (‘Firema’), has successfully completed the transfer of its entire business unit to the Italian State Railways (Ferroviere Della Stato). The deal realized a net consideration of EUR 66,095,000, which Firema used to settle existing creditors. TRSL confirmed this divestiture will halt future cash requirements from TRSL to Firema, which had been incurring substantial losses.
Overseas Business Unit Divestiture Finalized
Titagarh Rail Systems Limited (TRSL) has formally disclosed the completion of a significant strategic transaction involving its overseas associate, Titagarh Firema SpA, based in Italy. Firema has finalized the transfer of its entire business unit to Fabbrica Italiana Treni S.p.A, which is owned by the Italian Government (State Railways).
Financial Consideration and Creditor Settlement
The transfer was executed for a net consideration amounting to EUR 66,095,000. The entirety of this received amount has been immediately utilized by Firema to make payments to both secured and unsecured creditors as part of the ongoing CNC process overseen by the Court of Naples. Following this sale, the shareholding structure of the residual Firema entity remains unchanged as of the date of this disclosure.
Strategic Rationale and Impact on TRSL Operations
TRSL originally acquired Firema in 2015, a move that was pivotal in establishing TRSL’s Passenger Rolling Stock business in India, including the setup of an aluminium car body facility. However, despite cash infusions from TRSL over recent years, Firema continued to face substantial losses. This transfer is expected to stop the ongoing cash requirement from TRSL towards the Italian entity.
Crucially, TRSL management has confirmed that this divestiture will not impact the ongoing operations of Titagarh Rail Systems Limited. TRSL maintains a robust domestic pipeline, currently executing prestigious orders for Metro Coaches, Vande Bharat Trains, and propulsion systems, boasting a total order book in this segment of INR 10,791 Crores as of the last reported quarter.
Source: BSE
