Wind turbine manufacturer Suzlon Energy has decided to rework its payment schedule to acquire a 22.4% stake in German REpower Systems AG, after its plans to raise Rs 1,800 crore by way of a rights issue fell through.
Suzlon will now pay the acquisition cost of 270 million euros in three tranches, starting this month and ending in May next year. On completion of the transaction, Suzlon will own 91% in REpower.
“The revised payment schedule has been agreed upon by Portugal based Martifer Group,” Suzlon Energy said in a filing to the Bombay Stock Exchange.
According to the new payment schedule, Suzlon will pay Martifer 65 million euros in December 2008, 30 million euros in April 2009 and the final tranche of 175 million euros in May 2009.
According to Vivek Kher, vice-president, corporate communication, Suzlon, as per the company’s original agreement with Areva and Martimer, the transaction was expected to be completed in May 2009. But earlier this year, Suzlon said it wanted to complete the acquisition in December 2008, hoping to raise Rs 1800 crore through a rights issue that would enable the company to make the payment at one go.
“Due to adverse market conditions, plans for the rights issue have not taken off. Therefore, we have mutually agreed to work out the payment in three tranches starting this month,” Kher said.
Suzlon shares were up 6.53% on the Bombay Stock Exchange to close at Rs 57.95 on Tuesday.
Suzlon Energy had, in September, entered into an agreement with Martifer SGPS SA, whereby it had been agreed on exercising the option of an early acquisition of Martifer’s 22.48% stake in REpower Systems AG, Germany, for a total consideration of 270 million euros.