Sterling and Wilson Renewable aims to raise 1,500 crore in equity

Sterling and Wilson Renewable Energy Ltd. (SWREL), a company promoted by the Shapoorji Pallonji Group, is thinking about selling equity shares to raise up to Rs. 1,500 crore to pay off debt due this fiscal year. According to the individuals cited above, one of the options being considered is selling shares to investors using the qualified institution placement (QIP) method.

Payment liabilities for the power generation company, in which a Reliance Industries-affiliated subsidiary acquired 40% interest in 2022, totaled 1,000 crore by December 2023. The decision to raise money was made shortly after two bank guarantees (BG) totaling 390 crore rupees were invoked by clients from abroad who claimed that a project carried out by the company's overseas subsidiaries Wilson International Solar FZCO and Sterling had been improperly executed. 

Sterling contends that the bank guarantees were incorrectly used and has taken legal action against the two clients. In order to fulfil its obligation to pay 390 crore by the end of October 2023, SWREL extended corporate guarantees in favour of these BGs, which were issued by Emirates National Bank of Dubai. 

One of the aforementioned individuals stated that the company and Emirates NBD are in discussions to change the non-funded obligation (BG) into a fund-based obligation (a term loan). The company's liabilities would increase but it would also experience some relief if the 390 crore BG was turned into a loan, he noted. Through the fundraising, SWREL hopes to become debt-free, which will raise its valuation. The company has a market capitalization of 7,003 crore rupees, and its shares finished at 369 on the Bombay Stock Exchange, down 1.72% from the previous day.