Suzlon Energy, one of the world’s largest wind turbine makers, has sold 35.2% stake in subsidiary Hansen Transmissions for $370 million, it said in its filing.
Suzlon’s wholly-owned subsidiary AE Rotor Holding B.V, through which it holds stake in Hansen, completed the transaction through Bank of America-Merrill Lynch and Morgan Stanley who were the managers and book runners to the placement. Suzlon did not disclose who bought the stake.
The company sold 236 million depository shares of Hansen at 95 pence a share. After the deal, AE Rotor continues to own 174.6 million depository shares representing 26.06% of the company. Suzlon has said, it will not sell any more shares in Hansen for the next 180 days. There are no changes at the board level pursuant to the stake sale, Suzlon said in a regulatory filing.
With the latest stake sale, Suzlon has encashed around $470 million from Hansen. Its remaining holding of 174.6 million depository shares are valued at around $307 million. In effect, Suzlon is sitting on a 20% upside on its three-and-half-year-old transaction.
Suzlon share price, that went up on Thursday and has dropped down again, is now trading flat compared to the price on Wednesday, a day before the stake sale announcement. Hansen stock was down 5% compared to the closing price on Thursday of 113 pence during early morning trade at LSE.
“Suzlon has proactively undertaken strategic and financial initiatives to develop a sustainable capital structure,” said Hansen in a filing on Thursday.
Suzlon has also started discussions with its bankers to implement a broad-based debt consolidation and refinancing scheme aggregating to $3.1 billion in value. The company promoters, Tulsi Tanti and his family, have also cut their stake in the firm to raise funds. The stake sale by Suzlon will not have any impact on the long-term supply arrangements between the two firms, Hansen added in its statement.
Earlier this year, Suzlon sold a 10% stake in Hansen to London-based investment firm Ecofin Ltd. Post that deal, Suzlon’s stake in Hansen fell to 61.28%. In 2006, Suzlon had acquired Belgium-based Hansen, a leading wind turbine gearbox manufacturer, for $645 million (€465 million) in an all-cash deal.
Thereafter, it floated it on the London Stock Exchange in December 2007 to raise about €400 million through fresh issue of shares.
This IPO diluted Suzlon’s holding to 71%. London-based investment company Ecofin bought 10% in Hansen for Rs 500 crore ($100 million at that time) early this year, leaving Suzlon with 61% in the company.
Suzlon has been reeling under the pressure of debt and posted a net loss of Rs 356 crore for the quarter ending September ’09. The company’s net debt stood at Rs 12,525 crore at the end of this quarter.