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Suzlon Energy plans assets sale to raise Rs 15 billion

According to reports, Pune-based Suzlon Energy Limited, the world’s fifth-largest wind turbine supplier, is planning to sell its assets and raise about Rs 1,500 crore through it.

“We are in process to sell our assets in India and overseas. Through this, we expect to raise about Rs 1,500 crore,” said Kirti Vagadia, CFO, Suzlon Group.

Two of the fifteen assets, which the company plans to sell, are in abroad. These assets have components manufacturing facility and old plants. Suzlon wants to sell some of its assets in Gujarat, Maharashtra, Tamil Nadu and Pondicherry.

Vagadia said “We successfully divested our 75 per cent stake in China last year. We have identified non-critical assets and are at various stage of selling. The assets, primarily located in India, comprise few component facilities and realty. While there is a huge investor interest for the assets, deal closure in the current real estate environment is getting difficult. We expect the situation to improve after the general elections.”

He further said, “Though we are selling our assets to reduce debt, we are not in a hurry to do so. It will be sold when we get proper value for our assets.”

The company said that the process of selling assets would at least take 12 to 18 months.

“We are passing through bad times due to global slowdown. Indian market is also expected to bounce back in 2015 and as leader of the industry in India, we are expecting good times ahead,” he said.

It may be mentioned here that, Suzlon Energy is planning to sell shares in its German subsidiary Senvion SE (erstwhile RE Power) to raise Rs 10,000 crore by listing it on the London Stock Exchange (LSE).

The company will have to dilute 25 per cent stake in Senvion to meet the UK listing norms and expects Rs 40,000 crore valuation for the unit.

He said, “European capital markets, shut for quite some time, have opened up now and have shown huge appetite for clean and renewable energy. Senvion is a marquee asset in wind space, with strong growth and profitability, besides being debt-free. We are exploring few corporate finance solutions to tap into the opportunity. However, it is too preliminary to talk about the same at this stage.”

Regarding entering new markets, Vagadia said, “The plan is to focus on the emerging economy markets which have less working capital and high margins. US is now heavily shifting its focus from coal-based and conventional energy to gas and renewable energy. Since, we are a capital intensive industry, and with low cost of funding in US, it makes good sense to have a manufacturing base there.”

The company also plans to increase its presence in Asia.

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