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.
Like this report? Sign up for our daily newsletter to get our top reports.