European wind turbine makers interested; deal could be $1 billion.
Suzlon Energy, the world’s fifth-largest wind turbine maker, is in discussions with a consortium of wind equipment component manufacturers in Belgium, in addition to some leading turbine manufacturers in Europe, such as Vestas, to sell off its gear box manufacturing subsidiary, Hansen Transmission.
The company aims to raise about $1 billion from the sale of a 61.28 per cent stake, said two banking sources.
Suzlon is evaluating four proposals and the deal could be concluded within a month or two. At present, Denmark-based Vestas and a Belgium-based consortium of major wind component makers are the frontrunners for Hansen, which has manufacturing assets in India, China and Belgium, said sources. Sources said Cockerill Forges, Owen’s Corning, Pauwel’s International and Power Climber are the major wind component manufacturers in Belgium referred to.
| IT’S BLOWING IN THE WIND |
| * The company aims to raise about $1 billion from the sale of a 61.28 per cent stake |
| * It is evaluating four proposals and the deal could be concluded within a month or two |
| * Denmark-based Vestas and a Belgium-based consortium of major wind component makers are the frontrunners for Hansen |
| * Sources said the divesture of Hansen would not affect the gearbox requirements of Suzlon |
| * One of the main aspects of the discussions includes continuation of Hansen as a supplier of gearboxes for Suzlon |
| * Suzlon bought Hansen in March 2006 as a strategic asset, when the wind energy industry in Europe was in trouble |
“German firm Winenergy AG, Suzlon’s largest supplier of gearboxes, was also considering buying Hansen. But their current stand is not clear,” said a Mumbai-based banker. Gamesa, the Spanish wind turbine maker, had earlier said the company was not in the race to buy Hansen.
A Suzlon spokesperson declined to comment. In January this year, Suzlon had sold off a 10 per cent stake in Hansen Transmissions to the London-based investment company, Ecofin, for Rs 60 crore.
Suzlon has a debt of about Rs13,000 crore and has to repay a part of it soon. The company had posted a loss of Rs 453 crore for the first quarter of 2009-10, mainly due to poor order inflow. The company recently undertook fund raising of $202 million, through Global Depository Receipts (GDRs) of $108 million and $94 million, via an issue of zero-coupon convertible bonds.
Sources said the divesture of Hansen would not affect the gearbox requirements of Suzlon. One of the main aspects of the discussions includes continuation of Hansen as a supplier of gearboxes for Suzlon. Currently, Suzlon procures only 40 per cent of its gear box requirements from Hansen, that too only from last year. A majority of its supplies are from the German gearbox maker Winenergy AG, which has manufacturing units in Chennai, Tianjin in China and the US, besides Germany.
Suzlon bought Hansen in March 2006 as a strategic asset, when the wind energy industry in Europe was in trouble. In March 2006, Suzlon’s Netherlands subsidiary AE-Rotor Holding BV had acquired Hansen, one of the world’s largest wind energy and industrial gearbox manufacturers, for $565 million or close to Rs 2,500 crore in an all-cash deal. After the takeover, Hansen, founded in 1923, was expanded with new manufacturing facilities in Belgium, India and China with an investment of Euros 950 million (over Rs 5,500 crore).
