Up To $1 Billion Expected From Sterling & Wilson Solar Share Sale

Around US $1 billion is expected to be raised in the sale of up to 30% of Sterling & Wilson’s solar engineering arm. The funds will come from a pre-listing stake sale by an initial public offering (IPO), and will be used to reduce the debt of the 153-year-old conglomerate.

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The Shapoorji Pallonji Group, led by reclusive billionaire Pallonji Mistry, plans to raise around US$1 billion by selling an up to 30% stake in the solar engineering arm of Sterling & Wilson.

Investment talks are said to be underway with overseas multilateral agencies and sovereign funds, and pre-IPO placements will probably be completed within six months, it said. The funds will be used to reduce the company's debt, of which no specific details were shared.

This September, IHS Markit revealed its list of global non-residential EPC players. Sterling and Wilson ranked second, behind TBEA Sun Oasis, and ahead of Sungrow. Overall, the company has an installed solar capacity of more than 1,930 MWp, while 2,450 MWp is under-construction.

According to Khurshed Daruvala, chairman of Sterling & Wilson's solar unit, which provides engineering, procurement and construction services, the company will generate revenues of Rs 95 billion ($1.32 billion) by the end of FY2018-19. The business is currently ramping up its presence in the United States and Australia, where the market potential is around $10 billion for solar contracts, he continued.

The Rs 40,000 crore ($5.6 billion) Shapoorji Pallonji Group spans engineering and construction, energy and infrastructure, real estate, textiles, financial services and water.

According to Bloomberg, the group has raised bonds and loans equivalent to at least $4.3 billion since the beginning of 2014 and has set a “modest target” of raising around Rs 3,000 crore ($417 million) by March 2019 through asset sales and infusions from the founder family.

Sterling & Wilson was formed in 1927 as Wilson Electric Works and subsequently became Sterling & Wilson in 1971 when the Shapoorji Pallonji Group took a 51% stake in the company.

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