Business OpportunitiesSuzlon sells 35% stake in Hansen
Will raise Rs 1,729 crore through sale in Belgian arm to reduce debt burden.
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Suzlon Energy today sold a 35.22 per cent stake in Hansen Transmission, its Belgium-based subsidiary, through a secondary placement of depository interest for $370 million (Rs 1,729 crore), as part of its efforts to retire mounting debt.
AE-Rotor Holding BV (AERH), a wholly-owned indirect subsidiary of Suzlon Energy, which bought Hansen three years earlier, has completed a secondary placement of about 236 million of depository interest at 95 pence each, Suzlon said in a statement.
With the sale, Suzlon’s holding in Hansen has declined to 26.06 per cent from over 61 per cent. The sale would not result in changes in the composition of the board in Hansen.
This is the second round of stake dilution in Hansen. In January, Suzlon Energy had sold a 10 per cent stake in the company to raise Rs 600 crore.
“Our acquisition of Hansen was guided by long-range strategic interests that we see being delivered today. Since the initial investment, we have seen enormous value creation in Hansen, the company has expanded around the world, adding manufacturing capacity and jobs that will support the wind energy sector’s growth in the years to come,” said Suzlon Energy Chairman and Managing Director Tulsi R Tanti in a statement issued in the evening.
In May 2006, Suzlon had acquired Hansen Transmissions, a wind turbine gearbox designer, manufacturer and supplier, for ¤431 million (around Rs 2,500 crore). To fund its expansion in India and China, in November 2007, Hansen, now listed on the London Stock Exchange, had raised ¤400 million (about Rs 2,300 crore) by issuing 164 million shares through an initial public offering (IPO).
“This transaction is an important step towards further optimising our debt profile. We have developed a good relationship with Hansen, hence securing our gearbox supplies for the long term. As the majority shareholder in the company, we will continue to work towards creating even greater value,” Suzlon Chief Operating Officer Sumant Sinha said.
Earlier in the day, Suzlon had said that Merrill Lynch and Morgan Stanley were appointed managers and joint book runners for the share sale.
Suzlon was trying to sell off Hansen either fully or partially to repay its consolidated debt of Rs 13,762 crore. Suzlon was in discussions with a consortium of wind equipment component manufacturers in Belgium, in addition to some leading turbine manufacturers in Europe, to sell its stake to raise $1 billion (around Rs 4,700 crore).
Over the past six months, Suzlon had raised debt of Rs 1,175 crore from the promoters, issued depository receipts worth $108 million (around Rs 500 crore) and raised other debt amounting to $94 million to meet operational expenses and to check the debt level from spiraling higher.
Suzlon, which had to rectify rotor blades of its entire V2 type S88 – 2.1 Mw turbine fleet due to manufacturing defects, had reported a loss of Rs 355.5 crore in the third quarter ended September, as against a loss of Rs 22.8 crore a year earlier. During the period, consolidated revenues shrank by 44.4 per cent to Rs 4,793 crore.