Jiangsu Longzhe Technology and Trade Development Co Ltd has offered to invest $125 million (about Rs 825 crore) in Diamond Power Infrastructure Ltd, the Indian electrical-equipment maker said.
The investment will be subject to the approval of a debt restructuring process by lenders to the company, Diamond Power said in a stock-exchange filing.
The amount will be invested through a partially convertible instrument. The instrument will be partially converted to shares for a price not less than Rs 103.5 apiece and will give the investor a stake of no more than 51% in the company, the filing said.
The company said that Longzhe is a diversified private group that has interests in education, infrastructure and entertainment among other sectors. It added that it had appointed Ernst & Young as an adviser for its debt restructuring plan and that it plans to raise at least Rs 600 crore for working capital expenditure and expansion.
Diamond Power, which posted a consolidated net loss of about Rs 60 crore on net sales of Rs 1,515 crore for the nine months through December 2015, had a market value of almost Rs 318 crore after its shares fell 5% to Rs 55.75 apiece on Tuesday.
The shares have nearly tripled in the past two months to touch a one-year high of Rs 62.65 apiece on Friday from Rs 22.05 on March 29. Also in March, Kotak Private Equity part-exited Diamond Power at a loss by selling more than a third of its stake through open market transactions. Kotak PE had a 0.83% stake in Diamond Power at the end of March, according to stock-exchange data.
Founded in 1970, Diamond Power makes equipment including power cables, conductors, wires, power and control cables transformers and aluminium alloy conductors.
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