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Sterling & Wilson misses payments to lenders

Sterling & Wilson Renewable Energy (SWREL) missed scheduled payments to its lenders in September amid a liquidity crisis triggered by the invocation of bank guarantees by overseas clients, according to a rating report and a banker aware of the development. The account, however, remains standard.

The company informed lenders that the account would be regularised by the end of this month, and the missed payment is due to temporary liquidity issues that are being addressed, said the banker cited above.

In the last week of September, the company’s board approved a proposal to raise ₹1,500 crore in the form of debt or equity. ET had reported on September 6 that the company planned an equity share sale of ₹1,500 crore to repay debt maturing this financial year.

At present, the account is classified as a special mention account-0 (SMA-0), which effectively indicates that payment is overdue for less than 30 days. This status can be reversed if the payments are made by the company.

The company had a debt obligation of ₹426 crore in the month of September, of which it missed making payments of ₹217 crore, said a statement issued by India Ratings.

SWREL did not respond to ET’s request for comment.

Shapoorji Pallonji and Company Pvt Ltd has an 18.5% stake in the power generating company, wherein a Reliance Industries-linked entity has picked up 40% equity in 2022. A few months ago, overseas clients invoked two bank guarantees amounting to ₹390 crore ($47.2million), alleging improper execution of a project undertaken by its overseas subsidiary Sterling and Wilson International Solar FZCO. Sterling claims that the bank guarantees were wrongfully invoked and initiated legal action against the two customers, according to a stock exchange disclosure by the company.

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