Reliance Industries' arm to acquire 40% stake in Sterling & Wilson Solar
13 October 2021
Reliance Industries Ltd owned subsidiary Reliance New Energy Solar Ltd (RNESL) acquired a 40 percent stake in Sterling & Wilson Solar (SWSL) on Sunday through a combination of primary investment and secondary purchase, for approximately a total expenditure of ₹2,845 crores. The announcement came forth within hours of acquiring REC Solar Holdings for $771 million.
During the first segment of the deal, RNESL will acquire a 15.46 percent stake by way of a preferential allotment of 29.3 million equity shares in Sterling & Wilson Solar at Rs 375 per share, or roughly Rs 1,100 crore. In the second segment, RNESL will buy 1.84 crore worth shares, i.e., 9.7 percent equity from the Shapoorji Pallonji group at the same price of Rs 375 per share. Finally, it will go for a public offer to acquire up to 4.91 crore equity shares, representing 25.9 per cent in accordance with Sebi takeover regulations. This would result in the RIL arm holding 40% in Sterling & Wilson Solar, the joint statement said.
The acquisition will help Reliance to make inroads into Middle East markets where SWSL has a strong presence according to analysts. SWSL stake was on sale after the SP group defaulted on bank loans and was facing a severe liquidity crisis. As part of its one-time debt restructuring plan, SP group was to sell assets and utilise the proceeds to repay banks. This is the second disinvestment by the Shapoorji Pallonji Group within a month via a multi-stage transaction.
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