Crompton: ZIV sale alone may not lift investor confidence

Sale proceeds of Rs 845 cr to help partly retire Rs 1,233 cr of international debt

Much on promised lines, Crompton Greaves concluded the sale of its international automation business, ZIV, on Tuesday. This pushed up Crompton's stock by almost three per cent to close at Rs 70.85, which is not surprising given the multiple benefits arising from the deal.

The sale of business to Saudi Arabia's Alfanar Electric LLC for 120 million euros (Rs 845 crore), would also help Crompton retire part of the debt of approximately 175 million euros (Rs 1,233 crore) 

pertaining to its international power business. As the proceeds are deployed towards retiring international power business' debt, the interest burden may significantly