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SUZLON the world's fifth-largest supplier of wind turbines is close to raising Rs 600 crore from private equity investors. The deal is expected to be announced this week, an investment banker close to the development said.
He said the investors will provide funding in the form of debt which could later be converted into equity. The conversion of equity may lead to dilution of the stake owned by the promoters, the Pune-based Tanti family, who hold a 60% stake in Suzlon. It is possible that Suzlon may issue convertible debentures but this could not be confirmed.
When contacted, the Suzlon spokesperson said: "As a company policy, we do not comment on speculation." This round of fund raising is intended to finance the purchase of Portuguese energy firm Martifier's stake in its subsidiary REpower. Suzlon owns about 83% in REpower.
Under an earlier agreement Suzlon is supposed to buy Martifier's entire 22.5% stake in REpower in three phases. Suzlon has so far paid Martifer € 182.5 million to buy a 14.5% stake in REpower. Now, it needs to pay € 86.7 million (Rs 600 crore) by Friday June 5 to acquire the remaining 8% stake.
Post the transaction, Suzlon's shareholding in REpower will scale up to 91% that will enable it to transfer REpower's superior wind energy technology to other emerging markets such as India and China which is vital for its future prospects as the recent recession has affected sales of wind turbines in Europe and the US. It will also mark the complete pull out of Martifier from the German firm.
He said the investors will provide funding in the form of debt which could later be converted into equity. The conversion of equity may lead to dilution of the stake owned by the promoters, the Pune-based Tanti family, who hold a 60% stake in Suzlon. It is possible that Suzlon may issue convertible debentures but this could not be confirmed.
When contacted, the Suzlon spokesperson said: "As a company policy, we do not comment on speculation." This round of fund raising is intended to finance the purchase of Portuguese energy firm Martifier's stake in its subsidiary REpower. Suzlon owns about 83% in REpower.
Under an earlier agreement Suzlon is supposed to buy Martifier's entire 22.5% stake in REpower in three phases. Suzlon has so far paid Martifer € 182.5 million to buy a 14.5% stake in REpower. Now, it needs to pay € 86.7 million (Rs 600 crore) by Friday June 5 to acquire the remaining 8% stake.
Post the transaction, Suzlon's shareholding in REpower will scale up to 91% that will enable it to transfer REpower's superior wind energy technology to other emerging markets such as India and China which is vital for its future prospects as the recent recession has affected sales of wind turbines in Europe and the US. It will also mark the complete pull out of Martifier from the German firm.
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