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    Sterling and Wilson Solar crisis: All you need to know

    Sterling and Wilson Solar crisis: All you need to know

    Sterling and Wilson Solar crisis: All you need to know
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    By Pranati Deva   IST (Updated)

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    The promoters of Sterling and Wilson Solar (SWSL), Shapoorji Pallonji Group and Khurshed Yazdi Daruvala, have sought more time from the company’s board to repay loans worth Rs 2,341 crore as promised during its IPO, citing unforeseen reasons including a liquidity crisis at the group level.

    The promoters of Sterling and Wilson Solar (SWSL), Shapoorji Pallonji Group and Khurshed Yazdi Daruvala, have sought more time from the company’s board to repay loans worth Rs 2,341 crore as promised during its initial public offering (IPO), citing unforeseen reasons including a liquidity crisis at the group level.
    In a letter to the company, the promoters said the delay is “due to the significant and rapid deterioration in the credit markets creating a significant liquidity crisis.” They added: “… all of which was unforeseeable and coupled with the lesser than expected realisation from the initial public offering.”
    The stock of Sterling and Wilson Solar hit 20 percent lower circuit to Rs 321 per share on the BSE amid this delay.
    Here's all you need to know about the crisis:
    1. The promoters were supposed to pay Rs 2,563 crore to Sterling and Wilson Solar by November 18. Of this, Rs 2,335 crore was the principal and the remaining was interest.
    2. However, the promoters only repaid Rs 250 crore and wrote to Sterling and Wilson’s board on November 14 seeking a revised repayment schedule citing "significant and rapid deterioration in credit markets."
    3. On Thursday, the company informed the stock exchanges that its promoters, through a letter, have requested the board of directors to consider a revised repayment schedule for its Rs 2,341 crore of dues payable to the company as on September 30, 2019. “The new repayment schedule is being worked out along with the promoters. With the working capital requirement being very low, there will be no impact,” said Bahadur Dastoor, the chief financial officer of Sterling and Wilson Solar.
    3. It also added that the promoters had said in their letter to the board that they would “endeavour to reduce the outstanding loan by Rs 1,000 crore from the level as of the date of listing, by December 31, 2019”.
    4. The management of the company arranged for a conference call on Friday, where promoters tried to allay investor concerns about the financial health of the company.
    5. The company's management said in the call that it was working on a revised payment schedule, but did not specify a time frame for the remaining payment.
    6. Shapoorji Pallonji Group chairman Shapoor Mistry also explained to investors that the promoters stand by the company’s repayment commitments and a delay does not mean dishonouring that pledge.
    7. The amount realised from the IPO was Rs 2,850 crores before expenses and taxes compared with Rs 4,500 crores as initially contemplated which led to the default, the company explained.
    9. However, later on, Monday, the company clarified that "the promoters have already repaid Rs 250 crore as of September 20, and hence the loan amount has been cut to Rs 2,341 crore.
    10. According to the company’s presentation, Sterling and Wilson's borrowings stood at Rs 2,227.8 crore as of FY19. "Borrowings at
    Sterling and Wilson Solar is a solar EPC (engineering, procurement, and construction) solutions provider with Shapoorji Pallonji Group and Khurshed Daruvala as promoters.
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