Shares of CG Power and Industrial Solutions hit a 5 per cent upper circuit limit of Rs 10.99 apiece on the BSE on Friday after the company informed that its board has approved the execution of a securities subscription agreement (SSA) with Tube Investments of India for the issuance and allotment of securities to it on a preferential basis.
"We hereby inform you that the Board of Directors (the "Board") of the Company at their meeting held today have inter-alia considered and approved the execution of a securities subscription agreement with Tube Investments of India Limited ("Prospective Investor") dated 7 August 2020 ("SSA") for the issuance and allotment of following securities to the Prospective Investor on a preferential basis ("Preferential Allotment"), " CG Power said in an exchange filing on Friday.
At 02:24 PM, CG Power stock was frozen at 5 per cent upper circuit limit while Tube Investments of India was trading nearly 5.5 per cent higher at Rs 537.20. In comparison, the benchmark S&P BSE Sensex was trading flat at 38,004.46, down 0.06 per cent.
According to a Business Standard report dated February 13, 2020, CG Power's board battle led to value destruction for its shareholders. "A report by InGovern Research Services has raised several questions on the role of the board, banks, and private equity firm KKR India. “Banks and non-banking financial companies seem to have been fully cognizant of the situation in the company and other group companies and yet continued to fund and increase group company exposures against guarantees of the listed company,” the report had said. READ MORE
In July, private sector lender YES Bank had sold 2.66 per cent stake held in the company.