Positive on India, sold stake as valuations were high, says Whirlpool CEO
American home appliances giant Whirlpool Corporation successfully offloaded 24 percent of its stake in its Indian counterpart, Whirlpool of India, on February 20, through a block deal.
Whirlpool Corporation CEO Marc Bitzer has said that the company is “positive on India”, adding that the 24 percent stake sale this month was a way to make the most of high valuations.
“In India, we took our shareholding down to 51 percent. We believe in India for the long term, but if we have a business which is trading at 50 times multiple and your own company (parent entity) trades at a lot lower, it is basic arbitrage," Bitzer told CNBC on February 26.
Transaction Details
American home appliances giant Whirlpool Corporation successfully offloaded 24 percent of its stake in its Indian counterpart, Whirlpool of India, on February 20, through a block deal.a
The transaction, executed by Whirlpool Mauritius, a wholly-owned subsidiary of Whirlpool Corporation, involved the sale of 30.4 million equity shares of Whirlpool India in an on-market trade. The deal generated approximately $468 million in gross sales proceeds, aimed at reducing Whirlpool Corporation's debt.
Following the sale, Whirlpool Mauritius' holding in Whirlpool of India decreased from the previous 75 percent to the current 51 percent, as reported in a US SEC filing by Whirlpool Corporation. The company emphasised the subsidiary's execution of the equity shares sale on February 20, 2024.
Future Plans
Whirlpool Corporation clarified that the funds raised from the transaction are earmarked for debt reduction. The move aligns with the company's strategic financial planning.
Whirlpool of India, a prominent player in the home appliances sector, boasts three manufacturing facilities in Faridabad, Puducherry, and Pune. Despite the stake sale, Whirlpool Corporation reiterated its commitment to India as a key growth market and an essential component of its expansion strategy.
Whirlpool Corporation had previously disclosed its intention to sell up to 24 percent stake in Whirlpool of India on November 30 of the preceding year.
The regulatory filing, also shared on BSE by Whirlpool of India, aimed to raise funds and alleviate debt. In the fiscal year 2022-23, Whirlpool of India reported a total revenue of ₹6,210.25 crore.
On Tuesday, the BSE witnessed the trading of over 31.5 million shares of Whirlpool of India. The closing price for the shares settled at ₹1,287.70 apiece, reflecting a 3.24 percent decline.
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First Published:29 Feb 2024, 06:29 AM IST
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