Suzlon Energy-controlled wind power firm REpower Systems SE has passed a resolution on the ‘squeeze-out’ of its minority shareholders who hold the remaining 5 per cent that Suzlon does not own in the German firm, the company has disclosed on Thursday.
Under the squeeze-out proceedings, REpower’s minority shareholder compensation value was set at €142.77 per share, putting the total value of the transaction at approximately €63 million ($ 86 million).
“This is an important milestone in the ‘squeeze-out’ proceedings and we welcome the passing of the resolution. However, due legal process continues and it will be inappropriate to comment further on this development. The proceedings will continue in full compliance with the German corporate law,” said Tulsi R. Tanti, chairman and managing director of the Suzlon Group.
At 3 pm, shares of Suzlon Energy were trading at Rs 38.35 per unit on the BSE, down almost 7 per cent in a weak Mumbai market.
At present, Suzlon’s arm AE-Rotor Holding BV owns 95.16 per cent in REpower and under the German Stock Corporation Act, a shareholding of 95 per cent and above in a German firm enables the majority shareholder to initiate the ‘squeeze-out’ proceedings in respect of the minority shareholders. Suzlon has initiated the squeeze-out early this year which will result into REpower becoming a wholly owned subsidiary of the Indian company.
Suzlon had acquired stakes in European firms Hansen and REpower during 2006-2008 in large transactions but soon found itself laden with debt, with its borrowings hitting as much as $2.5 billion in mid-2009. Since then, the firm has been cutting its stake in Hansen and has recently announced a final exit while increasing its holding in Repower, in order to take the latter private.
Suzlon had acquired Hansen from private equity firms Allianz Capital Partners and Apax for $565 million in March 2006. It sold 10 per cent stake in Hansen to Ecofin at the beginning of 2009 for $100-$120 million and followed it up with a sale of 35.2 per cent stake for $370 million through a placement by the end of the year.
Suzlon Energy reported 1.5 per cent fall in consolidated revenue at Rs 17,879 crore, with EBITDA up 14.9 per cent to Rs 808 crore for FY11, according to an investor presentation on its website. Suzlon had a total order book of 4,639 MW including REpower, totalling $6.7 billion.