Suzlon rights plan off even as government okays Rs1,800 crore issue

26 December 2008

Wind power major Suzlon Energy said its plan to raise Rs1,800 crore through a rights issue of shares to the existing shareholders, including non-resident Indians,  stands cancelled despite an approval by the cabinet committee on economic affairs (CCEA).

The Cabinet Committee on Economic Affairs (CCEA) today said it has approved the Rs1,800 crore rights issue of equity of Suzlon Energy to its existing shareholders, on recommendations by Foreign Investment Promotion Board.

Companies wanting to issue rights equity of more than Rs600 crore has to seek cabinet approval for the same.
 
Suzlon, however, insisted that the rights issue has been cancelled despite approval from CCEA.

The Suzlon board had, in September, approved plans to raise up to Rs1,800 crore through allotment of shares to the existing shareholders on a rights basis. But it later suspended the plans due to choppy market conditions.

Reports early this week had said that private equity players Carlyle Group and TPG Capital among others were looking at buying a stake in Suzlon Energy Ltd,  the world's fifth largest wind turbine maker, which was seeking to raise $500 million.

Suzlon, which needs a large part of the money to buy Portugal-based Martifer's stake in its German unit REpower by May, wants to sell a 10-15 per cent holding for about $300 million, the sources said.