Suzlon Energy, the world’s fifth largest wind turbine maker, has sold a 10% stake in Hansen Transmissions International NV London-based investment firm Ecofin Ltd. Though the deal size is not known, a 10% stake in Hansen would be valued at around $115 million as per it closing share prices on December 31, 2008. The sale of 10% stake by Suzlon will take Ecofin’s stake in Hansen to 11.62%. Post the deal, Suzlon stake in Hansen would be approximately 61.28%, the company said in a statement.
In 2006, Suzlon had acquired Belgium-based Hansen, a leading wind turbine gearbox manufacturer, for $645 million (€465 million) in an all-cash deal. Suzlon has also acquired German wind power company Repower Systems AG, and plans to increase its holding to 90% in the firm. For which, it is planning to acquire an additional 22.48% stake held by Portugese-firm Martifier in REpower. Suzlon has been scouting for funds ever since it shelved its plans to raise Rs 1,800 crore through a rights issue in October.
Following a delay in raising funds, Suzlon entered into a revised agreement with Martifier to acquire shares in three tranches. As per the terms, Suzlon will acquire stake by paying Euro 65 million in December 2008, Euro 30 million in April 2009, and the final tranche of Euro 175 million in May 2009. The first step was completed on December 30, 2008.
As part of the deal, Ecofin has agreed not to sell the shares acquired from Suzlon until June 30, 2009. Ecofin can also nominate one non-executive director to the Hansen board. Hansen was listed at London Stock Exchange in December 2007, and raised 289 million pounds to set up factories in India and China.
Ecofin is an investment firm which specialises in the global utility and infrastructure sectors. It has $4.5 billion of assets under management and manages four funds. Some of its investments include 12.5% stake Suez-Tractebel, a unit of French waste and energy group Suez, and Bristol Water Holdings.
Suzlon is planning to raise $500 million, and was reported to be in talks with private equity majors Carlyle and TPG to sell a 10-15% stake for about $300 million. The firm is also planning to raise another $200 million through a debt offering or by selling stakes in other units, and the deal with Ecofin seems to be part of this strategy.