Gammon buys stake in Italian company

Mumbai: Engineering and construction company Gammon India will now look to build power plants following its acquisition of a 50 per cent stake in an Italian company that is the holding company of leading boiler manufacturer Ansaldo Caldaie.

Gammon announced the acquisition of a 50 per cent stake in Sofinter S.p.a. of Italy, which is Ansaldo’s holding company. Ansaldo makes a range of utility boilers, including super critical boilers, and heat recovery steam generators.

Gammon made this acquisition through its offshore step-down subsidiary. This is the company’s third overseas acquisition in the Italian market this year, which will enable it to take up power plant construction.

Mr Parvej Umrigar, Managing Director, Gammon Infrastructure Projects Ltd, said that the Sofinter acquisition was for €50 million (about Rs 325 crore).

Earlier this year, Gammon had acquired 50 per cent shares in Sadelmi of Italy for €7.5 million (about Rs 50 crore) and steam turbine manufacturer Franco Tosi Meccanica for €40 million (about Rs 250 crore).

According to information available on Ansaldo’s Web site, it has a joint venture in India, Ansaldo Caldaie Boilers India Pvt Ltd, in which it holds an 85 per cent stake and a local partner, GB Engineering, 15 per cent.

The Rs 80-crore Andsaldo Caldaie Boilers India undertakes jobs for building power projects. It gets the designs from Ansaldo in Italy and outsources manufacturing to the Tiruchi-based GB Engineering, which has a capacity to fabricate 10,000 tonnes of steel a year. Incidentally, GB Engineering has an option to raise its stake in Ansaldo Caldaie Boilers.

Now, Gammon India picking up 50 per cent stake in Sofinter effectively means that it has a 42.5 per cent interest in Ansaldo Caldaie Boilers India. With Gammon on board, Ansaldo Caldaie Boilers would look forward for a more active participation in the power equipment sector, sources in the know said.