Diamond Power gets third-party approval for Jiangsu Longzhe’s buyout offer
- Rahul Dravid duped of Rs4 crore by ponzi firm, files police complaint
- Death of Iran’s nuclear deal could set oil bulls loose
- Aramco is said to get cool response on IPO from US investors
- WTO ministerial meet: 50 nations to take up global trade issues
- Uber, Ola drivers threaten indefinite strike in Delhi, Mumbai from Monday
Mumbai: Diamond Power Infrastructure Ltd said on Wednesday that the buyout offer it got from Chinese conglomerate Jiangsu Longzhe Technology and Trade Development Co. Ltd has been approved by the third-party agency appointed by its lenders.
Consulting firm EY, formerly known as Ernst & Young, presented its assessment of buyers to the lending consortium on Tuesday, the company said.
“E&Y presented their evaluation on all responses received from various financial and strategic investors and decided to recommend to joint lenders forum that the offer received from Jiangsu Longzhe is the best offer,” Diamond Power Infrastructure said in a notification to the stock exchanges.
In a notification to stock exchanges on 16 May, electrical equipment maker Diamond Power Infrastructure said that it had received an investment proposal from China’s Jiangsu Longzhe, which wants to invest $125 million.
EY was mandated by Diamond Power Infrastructure’s lenders to evaluate alternative options and finalize the best option in June, in an attempt to have a fair and transparent process of investor induction, the Wednesday notification read.
“The modalities and terms sheet of Jiangsu Longzhe was discussed in detail to finalize the next steps of the transactions,” the notification read.
On receiving an approval on the proposal from its bankers, Diamond Power Infrastructure will be able to issue shares aggregating to at least 51% of the company’s equity to Jiangsu Longzhe. The Chinese conglomerate has interests in sectors ranging from education, infrastructure, entertainment and geosynthetics.
In July, the lenders to Diamond Power Infrastructure had finally invoked its powers under the strategic debt restructuring (SDR) norms to convert part of the company’s debt to majority equity. This is one of the few cases where a buyer was found before lenders invoked SDR. Previously, Gammon India Ltd had received interest from buyers for its power transmission business, before the lenders agreed to convert debt to majority equity.
As of March, Diamond Power Infrastructure’s consolidated debt stood at Rs.2,249.92 crore. Consolidated net sales for the March quarter stood at Rs.707.37 crore, up 45.7% from Rs.485.60 crore a year ago. Consolidated loss widened to Rs.260.84 crore from Rs.230.44 crore a year ago.