Making its renewable energy foray a big success, Reliance Industries is buying Sterling and Wilson Solar from its promoters. The company announced this on Sunday late evening. The development comes after Reliance Industries had announced the $771 million acquisition of REC Solar from ChemChina.
Shapoorji Pallonji & Co. Pvt. Ltd (SPCPL) and Khurshed Yazdi Daruvala, promoter-shareholders of Sterling and Wilson Solar, cumulatively own 69.36 per cent of the company, with the public owning the rest. The promoters had raised Rs 2,850 crore through an IPO in 2019, but subsequently failed to repay the loans of the company. This led to the exit of many if its shareholders citing a breach of trust.
Reliance New Energy Solar Ltd (RNEL), the wholly owned arm of Reliance Industries will be issued fresh shares of Sterling and Wilson as a preferential allotment of 2.93 crore shares at Rs 375/share, representing 15.46% of the company’s expanded equity base. Another 9.70% of the company will be acquired by RNESL from Shapoorji Pallonji & Co. Pvt. Ltd at the same price. It will also trigger an open offer for an additional 25.7% of the company as per Indian takeover regulations and if fully successful, RNESL will hold 40% stake involving a total payout of Rs 3630 crore.
The market capitalisation of Sterling and Wilson Solar was Rs 6,972.45 crore on Friday.
The company had a consolidated net loss of Rs 76.02 crore against a net profit of Rs 17.22 crore in the quarter ended on June 30, 2021.
The stock however has zoomed 60% in the last 3 months in anticipation of a deal. On September 29 this year, SP Group and SWSL repaid an outstanding debt of Rs. 2,563 crore, further paving the way for a transaction.