Suzlon the world’s fifth-largest supplier of wind turbines is close to raising Rs 600 crore from private equity investors, reports Economic Times. This comes ahead of Suzlon’s deadline on 5th June to pay e86.7 million (Rs 600 crore ) to acquire remaining 8% stake in REpower.
The buzz about Suzlon being in talks with PE players for raising capital to fulfill its payment obligation towards Martifier have been there for quite some time. Earlier media reports suggested that the wind turbine maker is in talks with Malaysia based NRI investor, C. Sivasankaran for raising private equity money.
Suzlon which has entered into an agreement to buy Martifier’s entire 22.5% stake in REpower in three phases is left with very few options for raising capital. Analysts believe that it can either dilute some of its stake in its subsidiary Hansen Transmissions or raise private equity money. Raising debt can not prove viable to the company as it already has a debt of Rs14,500 crores as on December 31, 2008.
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Suzlon’s Arrangement To Pay RE Power In Three Phases
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Under an earlier agreement Suzlon is supposed to buy Martifier’s entire 22.5% stake in REpower in three phases. The promoters of the company have been raising funds to finance the transaction with Martifier over the past month.
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They have raised a total of Rs 750 crore by selling their 6% stake in two tranches. While Rs 230 crore was raised by selling a 2% stake in early May, the latest stake sale took place last Monday when the Tantis sold a 4% equity stake for Rs 520 crore.
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Suzlon has so far paid Martifer e182.5 million to buy a 14.5% stake in REpower.
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Now, it needs to pay e86.7 million (Rs 600 crore) by Friday June 5 to acquire the remaining 8% stake.
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The markets have reacted positively to the news.
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