Suzlon Group,announced today that it had entered into a binding agreement to sell its equity in its wholly-owned China manufacturing subsidiary to China Power(Tianjin) New Energy Development Company Limited (CPNE).
The two companies signed a binding term-sheet on 22nd June, 2012 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 US$ 60 mn /RMB 384 mn / Rs 340 cr. The sale is subject to requisite regulatory approvals.
Speaking on the development, Mr Tulsi Tanti, Chairman – Suzlon Group said,“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.”
“We believe this is a positive, strategic move for both companies; the Suzlon Group monetizes a high-quality enterprise that we have built up since 2006, and CPNE expands its base and capabilities in a highly competitive marketplace. We strongly believe that China will maintain its position as the world’s largest wind market, and we continue to remain fully committed to China and our customers here. Looking ahead, we will approach this market by combining development with an innovative partnership model.”
Suzlon Group established its marketing operations in China in 2005, followed by the set up of its wholly-owned manufacturing facility in 2006. The company has to-date installed over 900 MW of wind capacity in China.