Suzlon in €1-bn pact with Centerbridge to sell subsidiary Senvion SE
22 January 2015
Suzlon Group has entered into an agreement with Centerbridge Partners to sell its whole-owned turbine manufacturing arm Senvion SE for about €1 billion \(about Rs 7200 crore). The deal also has a future earn out clause of up to 50 million euros (about Rs 360 crore).
Senvion, formerly REpower Systems, which Suzlon acquired in 2007 after Areva pulled out of the race for it (See: Suzlon acquires wind turbine major Repower as Areva quits bidding) is the world's fifth-largest manufacturer of onshore and offshore wind turbines.
The acquisition of REpower, and the stake buyout of other investors, burdened the company with a large debt.
The 100-per cent stake sale of Senvion SE is in line with Suzlon's strategy to reduce its debt and focus on the home market and high growth market like USA and emerging markets like China, Brazil, South Africa, Turkey and Mexico. The transaction is expected to be closed before the end of the current financial year.
''We are pleased to announce this development which is in line with our strategic initiative to strengthen our balance sheet. The proceeds would be used for debt repayment thereby reducing interest cost and augment business growth," said Tulsi Tanti, chairman, Suzlon Group.
Tanti said the company will focus on high growth markets like India, the US and other emerging economy markets.
"The Indian government's significant thrust on renewable energy offers a conducive policy framework to the sector which Suzlon is best equipped to capitalise. Suzlon will offer its wind and solar hybrid technology solutions to contribute towards achieving the country's target of 'sustainable energy for all'. With our market leadership, right technology, proven project execution capabilities and best in class services, we are best positioned to tap the high growth potential in home market," he added.
Stefan Kowski, managing director, Centerbridge Partners, said, ''Senvion is a company with impressive technology and leading market positions. The global market environment for renewable energies is promising for a wind turbine manufacturer, particularly for one of the most experienced players in the industry with onshore and offshore capability. We are confident that Senvion will continue its track record and, together with the company's management, we look forward to supporting its continued development as a profitable and growing company."
The transaction is subject to regulatory and other customary closing conditions.