Sterling and Wilson Solar: All you need to know about the company’s troubles

Venkatesh Ganesh | Updated on November 19, 2019

Sterling and Wilson logo

Wondering what transpired in the case related to one of Sharpoorji Pallonji’s companies? This is the story

Sterling and Wilson Solar, the first company from the Shapoorji Pallonji stable that got listed recently, has seen its share price fall dramatically from Rs 537 to Rs 289 (hitting two sessions of lower circuit). Sterling and Wilson Solar is a solar EPC (engineering, procurement, and construction) solutions provider and its promoters are Shapoorji Pallonji Group and Khurshed Y Daruvala.

Here’s what transpired

On November 14, Sterling and Wilson Solar released its September-ended quarter numbers. This is the first quarter of its performance after the company got listed in August.

At the time of listing, the promoters were supposed to pay Rs 2,563 crore to Sterling and Wilson Solar by November 18 (3 months after listing date). Of this, Rs 2,335 crore was the principal and Rs 228 crore was interest.

The promoters, on November 14, wrote to the Sterling and Wilson's Board saying that they seek a revised payment schedule. While they paid Rs 250 crore, for the remaining outstanding amount of Rs 2,341 crore (principal amount of Rs 2,085 Crore and interest of Rs 256 crore) as on September 30, 2019, they stated that due to the significant and rapid deterioration in the credit markets, has created a significant liquidity crisis, all of which was unforeseeable.

This coupled with the lesser than expected realisation from the initial public offer (IPO) have the promoters in a spot of bother. From the IPO, Sterling and Wilson realised Rs 2,850 crores before expenses and taxes, much lesser from their expectations of Rs 4,500 crore.

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. 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”.

Shapoorji Pallonji Group chairman Shapoor Mistry reiterated that the promoters stand by the company’s repayment commitments and a payment delay does not mean dishonouring that pledge. The promoters have not yet given definitive timelines to repay the loans.

Published on November 19, 2019

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