Wind turbine manufacturer Suzlon Energy Ltd has said that it is planning to sell its remaining 26.06 per cent stake in Belgium-based Hansen Transmissions International NV to German engineering firm ZF Friedrichshafen AG for $187 million. Hansen is a London Stock Exchange-listed wind turbine gearbox and industrial gearbox designer, manufacturer and supplier, which was acquired by Suzlon in 2006.
Suzlon’s exit from Hansen comes as it has started the ‘squeeze-out’ (buying out the remaining 5 per cent stake) in Germany’s REpower Systems AG for about €63 million or $90 million.
The stake sale by Suzlon comes as part of the $725 million offer, made by the $18 billion German engineering and manufacturing major ZF Friedrichshafen for Hansen. A total of 26.06 per cent stake is held by Suzlon’s wholly owned Dutch subsidiary AE Rotor Holding B.V.
The share price of Suzlon went up 5.48 per cent on Monday and was trading at Rs 54.3 per scrip at 3:18 pm up, up 2.65 per cent.
Suzlon had acquired stakes in Hansen and REpower during 2006-2008, but had to start a debt recast programme as its borrowings increased to $2.5 billion during mid-2009. Since then, the firm has been cutting its stake in Hansen 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 start 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. With the current leg of the transaction, Suzlon may stand to make around $100 million on the deal, but that does not take into account the cost of the debt incurred.
While Suzlon’s deal with ZF Friedrichshafen AG is under the ‘Irrevocable Undertaking,’ this will lapse if a new buyer offers at least 12.5 per cent more than the German firm’s offer.
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. The net debt of the firm stands at Rs 9,142 crore. Suzlon had a total order book of 4,639 MW including REpower, totalling $6.7 billion.
Last year, Suzlon had raised Rs 1,118 crore through rights issue while another Rs 770 crore ($175 million) was raised through foreign currency convertible bonds (FCCBs) in FY11.