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Whirlpool Corporation, the foreign promoter of Whirlpool of India, plans to sell up to a 24 per cent stake in the company through block deals. The transaction is estimated to be worth around $450 million, as per a Reuters report.
Whirlpool plans to sell its stake at Rs 1230 per share, a 7.6 per cent discount from Monday’s closing price, with the transaction expected to be finalized by Wednesday.
This move is in line with the company’s aim to reduce its debt burden, as stated in a U.S filing from November. Goldman Sachs is advising on the deal. Whirlpool Corporation, via its subsidiary Whirlpool Mauritius, held a 75 per cent ownership stake in the consumer durable goods manufacturer as of December end.
The company announced in January its plan to divest up to 24 per cent of its stake in the Indian unit, while maintaining majority control.
This aligns with the American multinational’s strategy to reduce debt and strengthen its financial position. Whirlpool’s profits have been falling for five consecutive quarters until the end of September due to increased competition and pricing pressures.
The divestment will involve at least 19 million shares in the Indian unit, valued at $282 million based on the proposed price. There is also a provision to offer an additional 11.4 million shares, potentially worth an extra $169 million.
Despite this, India’s key stock indices are near all-time highs, supported by strong economic growth and political stability expectations ahead of upcoming elections.
Over the last three months, Whirlpool shares have underperformed significantly, yielding negative returns exceeding 16 per cent. However, the stock has delivered a modest return of 3.5 per cent over the past year.
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