Tulsi Tanti’s wind turbine manufacturer Suzlon Energy Ltd said on Thursday that it signed a binding agreement to sell its German subsidiary, Senvion SE to private equity firm, Centerbridge Partners LP for approximately £1 billion or Rs 7,200 crore, as a part of its ongoing debt-reduction strategy.
The all-cash deal will also bring in future earnings of about £50 million or Rs 360 crore.
Suzlon chairman Tulsi Tanti said the deal is in line with the company’s strategic initiatives to strengthen its balance sheet. The company has a total debt exceeding Rs 16,000 crore at the end of the September 2014 quarter.
“The proceeds would be used for debt repayment thereby reducing interest cost and augment business growth,” Tanti said in a statement to the BSE.
The Ahmedabad-based company will focus on high growth markets like India, USA and other emerging economy markets, according to the statement.
The terms of the deal include Senvion providing its parent company with license for off-shore technologies for the Indian market while Suzlon will transfer its license for specific technologies for the US market to Senvion.
Suzlon had bought the Hamburg-based company in June 2007 for €1.2 billion. Post the acquisition, analysts had ranked Suzlon as the third-largest wind equipment manufacturer globally. However, the company suffered during the 2008 global economic crisis.
Since then, the company has restructured its operations, sold non-essential assets and had said that it would consider listing Senvion, as a part of its plans.
Suzlon shares tank over 6% on deal to sell German unit
Shares of Suzlon Energy fell over 6 per cent today after the wind turbine maker announced selling 100 per cent stake in its German subsidiary Senvion SE to US-based Centerbridge Partners.
Following this, Suzlon Energy’s stock tanked 6 per cent to Rs 16.15 on the BSE despite a positive opening.
On the NSE, it tumbled 6.1 per cent to Rs 16.15.