Sterling and Wilson Solar Board Pushes for Security From Promoters

The board of Sterling and Wilson Solar has asked company promoters to provide necessary security in respect of default on the loan installment of Rs 500 crore that was due on June 30. This was communicated by the firm in a release yesterday.

The firm, which has been struggling with the issue of its promoters repaying their debt to the firm, where approximately Rs 1200 crores still remains unpaid, even as Rs 1000 cores has been repaid on an agreed schedule. Till the June 30 default again.
The payment was to be made by Sterling and Wilson Private Ltd and its subsidiary Sterling and Wilson International FZE to Sterling and Wilson Solar Ltd and Sterling and Wilson International Solar FZCO.

“A meeting of the Board of Directors of the Company was convened on Tuesday, July 07,2020 at a short notice wherein, the Board noted that despite the sincere efforts of the Promoters, the global pandemic COVID-19 created a significant impact causing delays in their fund raising plans and consequently the June Instalment could not be repaid by June 30, 2020,” a regulatory filing from the firm states. The company’s board counts Mr Keki Manchersha Elavia, Mr Arif Salef Doctor and Ms Rukhsana Jina Mistry as independent directors.

As of now, following the board’s request, the firm’s promoters have promised to revert back with a plan.

The meeting yesterday had been called by the board to apprise the members of the Board about the specific actions underway at their end to complete facilitation of the June Installment at the earliest possible.

The issue of missed deadlines has rocked the firm’s market value, knocking its share price down from the IPO price of RS 780 to Rs 240 currently. This, despite some promising results , especially in the last quarter ending March. The firm had also announced some big order wins in Australia, a key market, recently.

Promoter pledges of their stakes has been a common way to raise capital in India, although the practice has come under scrutiny recently due to a volatile market that has seen some promoter holdings fall to very low levels.