Suzlon-Arcapita Bk JV to buy Honiton Energy

07 July 2008

Wind Energy equipment maker Suzlon energy has said that it will form a joint venture with Bahrain-based private equity (PE) giant Arcapita to explore a bid for Chinese alternative energy company Honiton Energy Holdings with a $2 billion investment. The JV will develop 1,650 MW wind energy in China.

Suzlon is the world's fifth leading wind turbine maker with 10.5 global marketshare.

Meanwhile, Suzlon has clarified that Honiton Energy buyout would not be through Suzlon, but through chairman Tulsi Tanti's privately held company, Collossus, which along with Arcapita is said to have already acquired Honiton Energy fully. Suzlon, does not have any stake in Collossus.

Honiton is a leading wind energy player in China and has 50 MW capacity currently. The Chinese wind power firm is said to have plans for adding another 100 MW capacity. It also plans to have 1650 MW by 2012. Collossus and Arcapita are likely to pump $2 billion for this capex.

Tanti and his brother had ploughed $130 million for a minority 26-per cent stake with Arcapita holding the remaining 74 per cent for the Chinese acquisition.

According to commentators the deal was so structured since Suzlon already has substantial debt on its books for subsidiaries, for the series of past acquisitions including buying out Areva's approximately 30-per cent stake in Germany's REPower Systems AG, in June. This acquisition consolidated Suzlon's total holding in REpower to approximately 66 per cent and voting rights of approximately 89 per cent through its voting pool agreement with Martifer of Portugal, the other major shareholder in REpower.