Suzlon Group has entered into a binding agreement to sell its equity in its whollyowned manufacturing subsidiary in China, Suzlon Energy Tianjin Ltd, to China Power (Tianjin) New Energy Development Company Ltd (CPNE). The two companies signed a binding term-sheet on June 22 for the sale of Suzlon Energy Tianjin with the majority of its assets and liabilities for approximately $60 million, or Rs 340 crore.
The sale is subject to requisite regulatory approvals.
Mr Tulsi Tanti, Chairman-Suzlon Group, said: “The dynamics of the wind energy market have changed considerably over the past year, and we are realigning our strategy to the China market with an agile, asset-light business model.” Suzlon established its marketing operations in China in 2005, followed by the setting up of its wholly-owned manufacturing facility in 2006.
The company has, to date, installed over 900 MW of wind capacity in the country.
Our Chennai Bureau reports:
Selling the Chinese subsidiary is part of Suzlon’s efforts to reduce its debt and meet its obligations to repay the foreign currency convertible bonds. At the end of last financial year, Suzlon’s net consolidated debt was about Rs 11,130 crore, half of which, according to a spokesman, is for working capital and the rest is longterm borrowings.
Suzlon has to meet its FCCB obligations of $569 million this financial year — $360 million this month and another $209 million in October. The company recently obtained approval from its bondholders to extend the maturity date for the bonds due for redemption this month by 45 days, till July 27.
In April, the company raised Rs 200 crore by selling some wind farms in India. On the China plans, the spokesman said Suzlon would shortly announce a new strategy.