Diamond Power up 10% on debt restructuring plans

The stock locked in upper circuit of 10% at Rs 44.85, bounces back 20% from intra-day low of Rs 37.35 on the NSE.

Diamond Power Infrastructure is locked in upper circuit of 10% at Rs 44.85 on the National Stock Exchange (NSE) after the company announced that the board will meet on Monday, May 16, 2016, to evaluate various debt re-alignment options including stake sale to strategic investor and re-organization of company’s various businesses.

The stock bounces back 20% from its early morning low of Rs 37.35 on the NSE. Till 11:17 am, a combined 1.72 million shares changed hands and there were pending buy orders for 308,458 shares on the BSE and NSE.

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The company said, the board will meet to evaluate various debt re-alignment options & approve a plan put forward by company mandated advisors on debt re-alignment with view to find value for potential strategic investors in the company based on the detailed study of its various business keeping in consideration companies requirement of long term capital infusion to increase capacity utilization and to set right the company’s capital structure and debt to equity ratio which ensures sustainable debt of its various business keeping in mind the debt obligation of the company.

The board will also evaluate an investment & approve proposal from strategic investor to infuse US $125 million i.e. Rs 825 crore in the company for a major corrections its capital structure and improving its debt/equity gearing & or its subsidiaries subject to approval of company’s lenders & shareholders, it added.

It will also take into consideration to authorize a committee of directors in the company to offer stake up to 51% to a strategic investor & corporate bodies, the company said.