The board of directors of Welspun Enterprises (WEL) and Welspun Projects (WPL) has considered and approved the proposal of merger of WEL, Welspun Inratech, Welspun Plastics and Welspun Infra Projects with WPL under the scheme of amalgamation and arrangement. As a result of the proposed reorganization all the above mentioned companies will merge in WPL, a listed entity, thereby shareholders of WEL will get 12 shares of WPL for every share being held in WEL.

The merger is aimed to consolidate and simplify corporate structure of Welspun Enterprises and its subsidiaries. The elimination of multiple entities is expected to benefit in terms of superior capital structure, increased flexibility to allocate capital more efficiently, reuction in administrative/compliance cost and enhanced visibility of earnings and cashflows.

The combined entity will have cash resources of approx. Rs 8 billion as at Sept. 30, 2014.

Shares of the company gained Rs 20.85, or 9.92%, to trade at Rs 230.95 at the BSE (9.49 a.m., Wednesday).