Block deal: Whirlpool of India shares in focus as promoters may sell up to a 24% stake

The foreign promoter of Whirlpool of India Ltd,  Whirlpool Corporation, could be selling up to a 24 per cent stake in the Indian-listed firm through block deals in a bid to cut its burden and improve financial position, as suggested in a November filing in the US. The transaction is likely to be worth around $450 million, a Reuters report suggested. As per the report, Whirlpool was planning to sell its stake at Rs 1,230 per share, a 7.6 per cent discount to Monday's closing price, with the transaction is expected to be finalised by Wednesday. Goldman Sachs is believed to be advising Whirlpool Corporation on the deal. Whirlpool Corporation, via its subsidiary  Whirlpool Mauritius, owned a total of 75 per cent stake in the domestic consumer durable goods manufacturer at the end of December quarter.

The company had in January announced its plan to divest up to 24 per cent of its stake in the Indian unit, while maintaining a majority control. Whirlpool's profits have been falling for five consecutive quarters until the end of September due to increased competition and pricing pressures, as per the report.

The Reuters report said the divestment will involve at least 1.9 crore shares in the Indian unit, valued at $282 million based on the proposed price. There is also a provision to offer an additional 1.14 crore shares, potentially worth an extra $169 million. The decision to sell shares came at a time India's benchmark stock indices were at all-time highs, supported by strong economic growth and continued political stability ahead of upcoming elections.

Over the last six months, Whirlpool of India shares have underperformed the market, falling 16 per cent against an 11.6 per cent rise in the BSE Sensex during the same period. The stock is down 2.5 per cent year-to-date.

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