IDFC Private Equity, an infrastructure-focussed PE firm with $1.3 billion under management, has swapped its stake in the components arm of wind turbine maker Suzlon Energy Ltd for an interest in the listed parent company. Suzlon Energy has informed BSE that the company has issued and allotted 31.99 million shares at a price of Rs 60 per share as preferential allotment to IDFC Trustee Company Ltd. A/c. IDFC Infrastructure Fund 3 A/c.
IDFC Private Equity now holds approximately 1.8% of Suzlon valued at Rs 170 crore ($38 million). The shares have a one-year lock-in.
These shares have been issued and allotted to IDFC PE for a consideration other than cash i.e. in lieu of its holding of 17.1% in SE Forge Limited, a subsidiary of Suzlon. With this transaction, SE Forge Ltd, which makes large forging and casting products catering primarily to the wind power industry, has become a wholly owned subsidiary of Suzlon.
IDFC PE had picked up 17.1% stake in SE Forge for Rs 400 crore a little more than two years ago (in September 2008).
IDFC PE had earlier too swapped shares of unlisted subsidiaries for stake in listed parent companies in other firms. Last year, it swapped shares in Delhi International Airport Ltd for a stake in GMR Infrastructure.
Suzlon underwent a refinancing of debt which came after its acquisition of companies like REpower and Hansen. It also sold a 35% of Hansen for around $370 million in November 2009 to reduce its net debt of $2.20 billion by the end of May earlier this year. Suzlon Energy has also sought permission of shareholders to raise Rs 5,000 crore by issue of securities. It is also looking to raise the borrowing limit from Rs 7,000 crore to Rs 10,000 crore.