Suzlon sells China unit to China Power for $60 million
23 June 2012
Suzlon Group, the world's fifth largest wind turbine maker, will sell its entire stake in its wholly-owned manufacturing subsidiary in China to China Power (Tianjin) New Energy Development Company Limited (CPNE) for around $60 million.
The two companies on Friday signed a binding agreement for the sale of Suzlon Group's China manufacturing subsidiary – Suzlon Energy Tianjin Limited – to CPNE, with the majority of its assets and liabilities, for approximately $60 million (RMB 384 million / Rs340 crore), Suzlon said in a release today.
The sale, however, is subject to necessary regulatory approvals.
Suzlon Group will continue its presence in China and complete all existing customer and contractual obligations, it added.
''The dynamics of the wind energy market have changed considerably over the past year, and we are realigning our strategy to the China market with an agile, asset-light business model to achieve the high growth and margins but with lower investments. Therefore, we have decided to realign our business there, as reflected in this transaction. This is also in line with our previously announced strategy to dispose of non-critical group assets to reduce our long-term debt,'' Tulsi Tanti, chairman of Suzlon Group, said on the deal.
''We believe this is a positive, strategic move for both companies; the Suzlon Group monetises a high-quality enterprise that we have built up since 2006, and CPNE expands its base and capabilities in a highly competitive marketplace,'' he added.
China, he said is the world's largest wind market, and Suzlon will continue to remain fully committed to China and its customers there. Suzlon proposes to approach the Chinese market in a partnership model.
Suzlon Group established its marketing operations in China in 2005 and followed it up by setting up a wholly-owned manufacturing facility in 2006. The company has to-date installed over 900 MW of wind capacity in China.