)
Suzlon Energy on Wednesday sold Big Sky Wind Farm, which owed it as much as $228 million, to EverPower Wind Holdings at a loss. The company, did not divulge the exact amount of sale.
“But we made up for most of the losses that we made by this sale, due to the currency appreciation. When we supplied equipment to the farm, the rupee was 42 to a dollar. But we will not see any more value depreciation from Big Sky as we had already made provisions for losses from it,” said a senior finance executive, who did not want to be named.
Suzlon was forced to sell the 240-megawatt wind farm, located in the mid-Western state of Illinois and owned by Edison Mission Energy, after it went bankrupt. Suzlon had lent $228 million to Edison, which the latter failed to repay. Suzlon acquired the farm asset in lieu of the loan defaulted by Edison. Suzlon had supplied turbines to Edison in 2009-10, which is also its biggest customer in the US. The money was to be paid in August 2012, but it never came in. Plus, Edison’s turbines had to be retrofitted by Suzlon after some of the turbines had reported breakage. This loss was absorbed by Suzlon in the form of provisions it had made in between 2009 and 2010.
“This sale of Big Sky Wind Farm to a sound long-term investor like EverPower is an important part of our dis-investment strategy to hive off non-core assets, and the net proceeds of the sale will be used to fuel our business growth,” said Kirti Vagadia, group head (finance) at Suzlon in a press statement.
Suzlon had plans to raise as much as Rs 1,500 crore via asset sale. While a significant portion of this asset sale money is already covered by the sale of Big Sky, Suzlon expects to raise the rest over the next 12-18 months.
Some of the assets that the company plans to sell include its component manufacturing business, other manufacturing assets as well as office complexes.
“There are as many as 13-14 assets that we are planning to sell,” said the senior finance executive.
He also added that if the market were more conducive, its asset sale process would have progressed faster.
Suzlon’s stock price went up by seven per cent on Wednesday to close at Rs 14.9 on the BSE.
