Crompton Greaves falls on heavy volumes

The stock was down 7% to Rs 70.45 on the BSE on back of heavy volumes

Crompton Greaves was trading 7% lower at Rs 70.45 on the BSE on back of heavy volumes after the company said that it has agreed to extend the Long Stop Date of the Share Purchase Agreement (SPA) with Pauwels Spaco to December 6, 2016. The stock hit an intra-day low of Rs 69.10 on the BSE.

On November 1, the company informed that pending the fulfillment of the certain conditions precedent to the SPA, it has been mutually agreed to extend the completion to November 30, 2016.

Earlier, on May 9, Crompton Greaves announced the company, along with its subsidiaries, CG International BV and CG International Holdings Singapore PTE, had signed a SPA with Pauwels Spaco – an SPV of First Reserve, for the sale of the Company’s Power Business in Europe, North America and Indonesia. The SPA envisages completion of the transaction by October 31, 2016.

The company said it continues to progress with sale of the B2B Automation Business in Spain, UK, Ireland, France and India at an enterprise value of Euro 120 million and towards this has made substantial progress towards completion as envisaged on January 31, 2017.

“The above strategic actions are intended to meet the Company’s objective of debt reduction, and on focusing on its core operations in India which provide a significant growth opportunity. Besides, we believe this restructuring improves the Company’s Balance Sheet and enhances Shareholder’s value,” Crompton Greaves said in a release.

The trading volumes on the counter jumped more than four-fold with a combined 11.57 million shares changed hands on the BSE and NSE till 12:38 pm.