Within hours of announcing acquisition of REC Solar Holdings for $771 million, the Reliance Industries announced on Sunday that its subsidiary will also acquire a 40 per cent stake in Sterling & Wilson Solar Ltd through a combination of primary investment, secondary purchase as well as open offer for around Rs 2,850 crore.
Reliance New Energy Solar Ltd (RNESL), a subsidiary of Reliance Industries, will first acquire 15 per cent in Sterling & Wilson by way of a preferential allotment of 29.3 million equity shares (equivalent to 15.46 per cent post preferential share capital) at Rs 375 per share. RIL will also acquire 18.4 million equity shares by RNESL from SP group company (equivalent to 9.7 per cent post preferential share capital) at a price of Rs 375 per share. This will cost RIL about Rs 1,100 crore.
The company will be also acquiring 25.9 per cent stake by way of an open offer at the same price. But as the current market price of S&W Solar is Rs 435 a share, the shareholders may not tender shares at the offer price. RNESL will hold 40 per cent of the equity capital of SWSL, consequent to acquisition in the open offer, follow-on acquisition of shares from SPCPL and chairman and co-founder of the company, Khurshed Daruvala, and sell down, if it is required. The promoters own 69.36 per cent stake in the company, which has a market valuation of Rs 6,972 crore as on Friday.