Within a week of acquiring the US-based Big SkyWind Park from Edison Mission Energy, Suzlon Energy is reportedly selling the unit. On April 2, Suzlon had acquired the 240 MW US wind farm asset in lieu of the loan defaulted by Edison.
Suzlon had lend $228 million to Edison to instal Suzlonís wind turbines. Edison failed to repay the loan and was taken to a court by Suzlon. Edison went bankrupt following which both parties settled on the sale of the Big Sky Wind Park to Suzlon. This was only part one of the transaction. The second part involves Suzlon selling the windpower within 120 days.
As per the US department of energy's Federal Energy Regulatory Commission order, the transaction had to be done in two parts. In the first, Suzlon would acquire 100% in Big Sky from Edison's subsidiary and in the second part, within 120 days of Edison's indirect ownership in Big Sky is transferred to Suzlon, Suzlon would be required to sell 100% stake in Big Sky to Everpower Wind Holdings. Everpower is a company engaged in developing, owning, and operating wind-powered generation resources in the US and is owned by Trireme Energy Investments. Suzlon has refused to comment on the development. Suzlon had only indicated the asset would be sold at an appropriate time. The current book value of Edison is around $90 million and Suzlon could take a hair cut in the sale. But this sale is expected to generate cash for Suzlon Energy and provide a breather till it is able to generate more resources through listing of its German arm.
The asset sale is part of Suzlonís turnaround plan. The company's lenders had reportedly approved efforts to sell the wind park assets and generate cash for the business. Suzlon stock rose 12.5% to R13.96 on BSE on Monday.