Intimation of approval for execution of Business Transfer Agreement (BTA) with ACE KATO PRIVATE LIMITED (a 50:50 Joint Venture Company as per Investment and Shareholders Agreement (ISA)
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ACE's Board has approved transferring its Heavy Cranes Business (truck cranes, crawler cranes, rough terrain cranes) to ACE KATO Private Limited via a Business Transfer Agreement on slump sale basis as a going concern. The Heavy Cranes Business contributed Rs. 85.77 crore revenue (2.58% of total standalone revenue of Rs. 3,320.32 crore for FY 2024-25). ACE KATO is a 50:50 joint venture between ACE and Japan's KATO Works Co. Ltd., with the consideration paid through subscription shares. The transaction is a related party transaction but conducted at arm's length. Expected completion is on or before June 30, 2026. The deal is outside any Scheme of Arrangement.
This transfer reduces ACE's revenue by about 2.6% but strengthens its heavy cranes segment through a strategic Japanese partnership. The stock may see neutral to slightly positive reaction as it streamlines operations via a dedicated JV entity with KATO, a known global crane manufacturer.