New Delhi: India’s largest wind turbine maker, Suzlon Energy Ltd, on Monday said it may sell all or part of its stake in unit Hansen Transmissions International NV to cut some of its debt amounting to $2.5 billion (around Rs12,050 crore).
“We are in the early stages of looking at a sale,” Sumant Sinha, chief operating officer, said in an interview at his office in Mumbai. “We want to keep some headroom in the current difficult market.”
The sale of the stake in the Belgian maker of wind turbine gearboxes, bought in 2006, could fetch $1.1 billion and help Suzlon reduce debt taken over the past two years to complete the acquisition of Hamburg-based REpower Systems AG this month. Suzlon’s debt was Rs11,800 crore as of 31 March, Anoop Kharayat, a company spokesman, said over the phone on Monday.
“They have huge debt and I expect them to spend the whole of this year reducing that,” said Chintan Mewar, an analyst at Finquest Securities Ltd in Mumbai. “They want to consolidate their position now and the revenue uptick may start in the next fiscal.”
Suzlon fell 5.2% to Rs117.10 after reporting on Sunday that profit in the three months ended 31 March declined 10%. The stock has gained 88% this year, outpacing the 53% increase in the benchmark Sensex index.
The board approved a plan to raise Rs5,000 crore on through the sale of shares or debentures, Suzlon said in a statement on Monday.
“It is an omnibus approval from the board so that we don’t have to go back to them if we want to raise funds,” Sinha said.
Suzlon acquired Hansen’s entire shareholding in March 2006 for €465 million (around Rs3,140 crore). The stake decreased to 71% after Hansen sold new shares to raise €440 million , Suzlon said on 29 January 2008. London-based investment company Ecofin Ltd. bought 10% in Hansen for Rs500 crore last year, leaving Suzlon with 61% in the Belgian company, which has a market value of $1.8 billion.
Suzlon founders, the Tanti family, sold 4% of the company’s equity to help fund the acquisition of REpower. The family owns 60% of Suzlon after the sale, the company said on 25 May.
Suzlon bought 33.85% of Repower in May 2007 for €1.2 billion. It increased the holding by buying Areva’s 30% stake in Repower for €350 million in June 2008 and a 22% stake held by Portugal’s Martifer SGPS SA for €270 million.