In a regulatory filing, Suzlon Energy said “This is to inform that Dilip Shanghvi and Associates who had entered into an Amended and Restated Shareholders’ Agreement dated 28th February 2020 with the Promoters/ Promoter Group of the Company and the Company, have informed the Company and the other shareholders, who are party to the Agreement, that the investor group has decided to terminate the Agreement in accordance with the terms of the Agreement.”
Suzlon added that there would not be any impact on the operations of the company on account of the termination of the agreement.
With the termination of the agreement, the investor group’s nominee director on Suzlon’s board, Hiten Timbadia, has also resigned with effect from September 26, Suzlon added.
“We signed a mutual agreement with Suzlon and it’s promoters in February 2015 (original agreement signed), making investments to help the company capitalize on the growing opportunities in the renewable energy sector,” said Dilip Shanghvi in a separate statement adding that the company has seen a turnaround under a challenging environment, which is a positive sign.
“While we will continue as investors in the company, we have taken a decision to terminate the formal Shareholder’s Agreement signed in 2015,” added Shanghvi.
In February 2020, Suzlon’s board had approved the company’s debt restructuring proposal and certain identified subsidiaries under the RBI circular dated June 2019.As part of the agreement, the company had issued up to 100 crore equity shares; up to 4.10 lakh or 0.01 secure optionally convertible debentures, and up to 50 crore warrants of Re 1 each.
The board had also approved issuance of equity shares or equity linked instruments to the tune of Rs 1,000 crore.
Those who were allotted the shares included Shanghvi Finance Pvt. Ltd., Aditya Medisales Ltd., other members of Dilip Shanghvi’s family, among others.
In 2015, Shanghvi had acquired a 23% stake in Suzlon Energy for Rs 1,800 crore.
Last October Shanghvi had also expressed intent to fully participate in the rights issue of Suzlon through which it raised Rs 1,200 crore.
In total, Dilip Shanghvi’s companies and family members held a little over 7 percent stake in the company.
Shares of Suzlon ended at Rs 25.98, up 1.88% on the BSE, Tuesday. Benchmark Sensex ended 0.12% lower.