Suzlon up 10% as lenders meet to discuss German arm sale

Wind turbine making unit, Senvion, might fetch Rs 7,200 cr

The stock of Suzlon Energy rose 8.5 per cent on Monday, following reports that the company had finalised the sale of its German offshore wind turbine making unit, Senvion, earlier known as REpower, to a private equity fund, for close to Rs 7,200 crore.

Suzlon executives met banks on Monday to discuss and take permission for the sale because the foreign subsidiary’s shares were pledged with banks, under a corporate debt restructuring scheme approved earlier, sources said.

In a statement to the stock markets, Suzlon said its board had not approved any such transaction and the company was exploring options for liability management.

Media reports earlier said the firm was in talks with a clutch of Chinese companies and the New York-based Centerbridge Partners. Suzlon did not reply to a mail sent on Monday. Bankers said Centerbridge Partners had made an offer to Suzlon which needed to be ratified by banks.

The stock closed at Rs 17.48 on Monday; it has risen 53 per cent in six months as Suzlon takes steps to cut its consolidated debt of Rs 17,000 crore. If the board is not happy with the offer, Suzlon may revive plans to list abroad to help it reduce stake and repay debt.

Suzlon acquired REpower in December 2009 for Euro 1.5 billion and renamed it Senvion in 2013.

The sale of the German firm will shrink Suzlon, which had reported revenue from operations of Rs 20,212 crore for 2013-14 with a net loss of Rs 3,520 crore. But its standalone revenue from operations was Rs 3,036 crore, and loss of Rs 924 crore. A substantial portion of its business was coming from Senvion, said analysts. With the sale of the German arm, Suzlon will concentrate on its Indian operations.  In an interview to this paper in December, chairman Tulsi Tanti said Suzlon was looking to expand its portfolio by venturing into solar power.

“We have to consolidate, achieve more growth and invest in technology to bring the cost of energy down. We do not require any acquisition but we are now focusing on the need for solar energy. No firm in the Indian market is providing end-to-end solar power solutions. Next financial year, we will begin offering both wind and solar parks,” Tanti had said.