Mumbai: The country’s biggest wind energy equipment maker, Suzlon Energy Ltd, may sell a part of its stake in Germany’s Repower Systems AG to benefit from an increase in the stock price. “Here is the opportunity for us, we may think of selling some of our shares in Repower in the market,” Tulsi Tanti, billionaire chairman of Suzlon, said on Tuesday. “It’s lucrative to sell some of the stock.”
On a roll: Suzlon wind turbines in Nandurbag, Maharashtra.
The announcement came as Suzlon reported a 29% rise in profit to Rs464 crore for the quarter ended March.
Repower shares have gained 56% since 25 May, when Suzlon ended an offer to stakeholders after a takeover bid. The Indian company needs funds to expand in Europe, the US and China, where customers are turning to alternative energy amid rising oil prices and growing environment concerns. The wind turbine producer expects Europe to overtake India as its biggest market.
Suzlon holds 87% of the voting rights in Repower, Tanti said. The company owns 33.6% of Repower, according to data compiled by ‘Bloomberg’, and has voting agreements with shareholders Martifer SGPS SA of Portugal and France’s Areva SA.
Repower shares climbed to a record this year on speculation Suzlon may increase its stake in the company. The share price advanced to €238.57 (Rs15,745) on Monday, the highest since an initial public offering in 2002, and has gained 87% this year.
Tanti declined to say if Suzlon would sell shares after buying Areva’s remaining 30% stake in Repower. Suzlon and Martifer secured control of Repower after winning a bidding war against Areva.
Paris-based Areva has the option to sell its shareholding at its discretion and will vote with Suzlon, the Indian company said in a statement to the Bombay Stock Exchange last year, without giving more details.
“Areva has the option to sell to us after one year at market price,” Tanti told analysts on a global conference call. “Areva will be the preferred supplier for us worldwide.”
Suzlon has the option to buy Martifer’s 23% stake after May 2009, Tanti said in Mumbai on Tuesday.
Repower shares have also been boosted by a Goldman Sachs Group Inc. prediction on 23 April of “profitable long-term growth” in the renewable-energy industry.
Suzlon rose Rs10.4, or 3.3%, to close at Rs318.35 on the Bombay Stock Exchange on Tuesday.