Suzlon Energy is selling its German unit to Centerbridge Capital Partners for $1.2 billion.
The company, which suffered India’s biggest convertible-bond default in 2012, will take the payment in cash as it reorganizes debt. The deal is expected to be completed before the end of March.
Suzlon will now on focus on home and high-growth markets, the company told Bloomberg in a statement. Suzlon Chairman Tulsi Tanti had said that he was serious about reducing borrowings and freeing up capital for projects. The liabilities of the company surged by 30 percent in three years to $2.8 billion by September, and it is seeking to emerge from a debt revamp program by the end of March.
The company will use Rs50 billion of the sale proceeds, or 68 percent, to repay the banks that helped fund the purchase of Senvion in 2007, Bloomberg reported quoting SBI managing director VG Kannan. SBI is one of the lenders.
Suzlon could receive an additional payment of up to 50 million euros from Centerbridge, depending on Senvion’s performance, the statement added.
Senvion, previously known as REpower Systems SE and a Suzlon subsidiary since 2011, makes wind turbines for onshore and offshore markets. Together with Senvion, Suzlon was the world’s fifth largest wind turbine manufacturer.
IANS