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Small-Cap Defence Stock Jumps 9% on JV Deal with Israeli Company

Published 02-06-2023, 11:44 am
PRAF
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By Malvika Gurung

Investing.com -- Shares of the defence engineering major Paras Defence and Space Technologies (NS:PRAF) jumped 9% on Friday and hit an intraday high of Rs 545.4 apiece after the company signed a joint venture pact with an Israeli company.

The defence products and solutions provider announced entering into a Joint Venture Agreement with the Isreal-based CONTROP Precision Technologies, with an aim to form a company that will undertake the business of manufacturing or producing the Electro Optic (EO) and Infra-Red (IR) systems for applications falling in line with the Government’s Make in India initiative. 

The proposed company will operate in the business of manufacturing as well as implementation or installation of Integrated Logistics Support (ILS) after the processes of sale support, training and others, in the EO/IR field.

The proposed shareholding of Paras Defence in the new company would be 30%, and that of CONTROP would be 70%, stated Paras in an exchange filing.

As per the terms of the JV agreement between the two companies, Paras will have a right to nominate one Director, and CONTROP will be given a right to nominate no more than three Directors on the Board of the proposed company.

For any activities like issuing equity shares, preference shares, warrants, options or other securities, the mutual consent of both parties would be required.

Shares of the proposed company will be issued to CONTROP and Paras Defence at face value.

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