IDFC PE acquires 17 per cent in Suzlon arm for Rs400 crore
29 September 2008
Mumbai: IDFC Private Equity has picked up a 17 per cent stake in SE Forge Ltd, a subsidiary of Suzlon Energy Ltd (SEL), for Rs400 crore.
The funds will be used to finance SE Forge's investment in its two facilities - a 120,000 tonne foundry unit in Coimbatore and a 42,000 rings per annum ring-rolling forging facility in Vadodara.
SE Forge is planning a vertical integration to establish itself as a specialised manufacturer of components for the wind energy industry.
''The wind energy sector across the world is facing an acute shortage of high quality forging and casting components. That is why we had decided to set up state-of-the art facilities catering to the highest standards of the global wind industry's requirements. Of course, our group companies will also benefit by getting access to high quality products. With IDFC's participation, SE Forge is set to grow into an industry powerhouse to meet the demands of a growing high-demand marketplace,'' said Tulsi Tanti, director, SE Forge, and chairman, Suzlon Energy.
''This investment fits very well with our theme of partnering excellent entrepreneurs to de-bottleneck the factors which hamper the infrastructure growth,'' said Luis Miranda, president and chief executive of IDFC PE.
Suzlon Energy, meanwhile, said its board has approved raising up to Rs1,800 crore through allotment of shares to existing shareholders on rights basis.
The board of Suzlon Energy has approved the shareholders' agreement to facilitate IDFC Private Equity to invest in SE Forge Ltd, a wholly-owned subsidiary of the company to an extent of Rs 400 crore, the filing added.
Post-approval, Suzlon's shareholding in SE Forge stood reduced at 82.9 per cent.
The board also approved increasing private investment limit in one of its subsidiary to 17.1 per cent, for a consideration of Rs400 crore, Suzlon Energy said in a filing with the Bombay Stock Exchange.