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There is no change in control at Suzlon: Tulsi Tanti

Interview with Chairman, Suzlon

Tulsi Tanti

Aneesh Phadnis Mumbai
With two big deals within a month, Suzlon’s chairman, Tulsi Tanti, has raised enough cash to pare debt and plan for growth. Tanti tells Aneesh Phadnis in an interview he will remain in control of the company after selling a 23 per cent stake in Suzlon to Sun Pharmaceuticals founder Dilip Shanghvi. Edited excerpts.

Can you explain the deal’s rationale and structure? How much are Dilip Shanghvi and his family investing?

We have  been working on correcting the capital structure of  the company by increasing the equity and reducing debt. Over the last two years our focus was on liability management and hence Suzlon was unable to tap business opportunities.
 
Dilip Shanghvi’s family and associates are investing Rs 1,800 crore. The infusion is in a single tranche and they will own 23 per cent of Suzlon on a preferential basis. They will help the company to get fund-based and non-fund working capital needed for projection execution. We are also forming a joint venture for developing a 450-Mw wind farm.

Why did Dilip Shanghvi choose Suzlon?

Suzlon is  a global player, we have a lot of potential and the equity investment will help support growth. Dilip Shanghvi has expressed interest in investing in renewables and it is about a social commitment too.

Are you prepared to give up management control?

The Shanghvi family is a financial investor. We remain in management control by virtue of a pooling arrangement for voting. We will continue to run the company, but the Shanghvi family will have one seat on the board.

Why is the wind farm being set up by a joint venture?

Suzlon has not invested in wind farms and that is not our core area. We will create a joint venture to develop the 450-Mw wind farm.

The total investment will be around Rs 3,200 crore and both sides will put in Rs 400 crore each as equity and the rest will be raised as project finance. We are yet to select sites.

What are be your priorities now?

We hope to conclude both the transactions — the Shanghvi family stake purchase in Suzlon and sale of Senvion to Centerbridge — by March. In the last few years Suzlon’s business expanded to 32 countries. The focus now is to return to profit in 2015-16. Prime Minister Narendra Modi is pushing for renewable energy and about $200 billion dollar investment is expected in the next five years.

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First Published: Feb 14 2015 | 10:48 PM IST

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