Suzlon moves to get full control of German unit Repower
07 April 2011
Indian wind turbine maker Suzlon Energy Ltd – already the world's third largest in the field – has initiated steps to gain 100 per cent control of its German unit REpower Systems AG, in which it has already acquired a 95.16-per cent stake. It notified the board of REpower on Monday to initiate 'squeeze-out' proceedings with respect to minority shareholders.
"The management board of REpower must take steps regarding the squeeze-out procedure. This will result in REpower being a wholly-owned subsidiary of the company. Raising the stake will give Suzlon control over REpower's cash and technology,'' Suzlon Energy said in a statement from Mumbai on Monday. It did not give details about the value of the deal.
Under German law, the owner of a 95-per cent stake in a company is entitled to a squeeze-out procedure where the minority shareholders' stake can be acquired on a compulsory basis. Suzlon increased its stake in Repower in 2007 by buying out other shareholders like Martifer and Areva; since then it has been increasing its shareholding to cross the 95 per cent threshold for a squeeze-out.
To successfully complete this procedure, Suzlon needs to appoint bankers to value the minority stake. The valuation will be validated by a court, in this case the district court of Hamburg. The court will appoint its own valuators to check if the minority shareholders are fairly compensated.
"The squeeze-out will be subject to additional expenditure, completion of procedural steps and timing requirements as may be required by German laws and regulations," Suzlon said in its statement from Mumbai. A report says Suzlon is raising $150 million through foreign currency convertible bonds (FCCBs), mainly to fund the acquisition.
It is also reported that the company plans to issue up to $200 million of foreign currency convertible bonds next week.