Crompton Greaves falls and tumbles
Crompton Greaves is the top loser since the opening bell; that seems to have become its favorite spot on the bourses! Dipping almost 9% to Rs.60 levels, the counter is steeped in a deep hue of red.
After two postponements, the news is finally out – its deal with Pauwels Spaco Ltd-an SPV of First Reserve for sale of its power business in Europe, North America and Indonesia stands terminated.
The company has said, “ Certain conditions precedents to the Share Purchase Agreement (SPA), continue to remain unfulfilled and the fulfillment of the same is beyond the reasonable control of the parties in the multi-geography/product line international power business of the company.”
In May 2016, Crompton Greaves had signed an agreement with Pauwels Saco – a SPV of First Reserve. This is for the CG’s Power Businesses in Europe, North America and Indonesia for an Enterprise Value of euro 115 million.
This was to be completed by 31st Oct 2016 but this was extended to 30th November and then to 6th December.
This news apart, there was disappointment on the performance front too. For Q2FY17, the company posted a consolidated net loss of Rs.10 crore v/s profit of Rs.11 crore; this was on a 5% rise in total income of Rs.1495 crore.
EBITDA slipped by a big 35% to Rs.83 crore and margins fell from 9.1% to 5.6%. Its interest outgo for the quarter has surged almost 160% to Rs.44 crore and for H1FY17 stands at Rs.75 crore v/s Rs.81 crore for entire FY16. Its borrowings as at 30th Sept 2016 stands at Rs.1832 crore v/s Rs.1236 crore, a 48% (YoY) increase.