Suzlon's stake sale talks with Shanghvi son

PV Powertech, promoted by Aalok Shanghvi, might agree to share swap deal, for a partial equity stake

Suzlon Energy, the Tulsi Tanti-promoted wind energy turbine maker, is in talks with billionaire Dilip Shanghvi's son, Aalok Shanghvi, for a possible merger or stake purchase with the latter's company, PV Powertech, which makes solar energy panels.

Dilip Shanghvi, promoter and managing director of Sun Pharmaceutical Industries, is ranked as the second richest Indian, with a net worth of about $18 billion. Aalok also heads the international marketing division of Mumbai-based Sun Pharma.

"This is expected to be a share swap deal, in which the PV Powertech promoters will get stake in Suzlon," says a person familiar with the talks. "This could value the PV Powertech stake at Rs 1,200-1,500 crore."

A spokesperson for Aalok Shanghvi said, "We have no comments to offer."

The Suzlon stock closed on Tuesday at Rs 17.55 a share on the BSE exchange, no change from the previous day's.

This valued the company at Rs 5,733 crore. This would mean a 21-26 per cent stake for PV Powertech promoters in Suzlon, which could help Aalok get a seat on Suzlon's board.

In a response to query sent to Suzlon Energy, the company said, "As a policy we do not comment on market speculation."

Last month, Suzlon sold its German unit, Senvion SE, to Centerbridge Partners for $1.2 bn in cash, to pare debt. The company had then said it would focus on the home and high-growth markets. In a call to analysts, Suzlon chairman Tulsi Tanti said he was very serious about reducing borrowings and freeing more capital for projects.

Suzlon's liabilities had surged 30 per cent within three years to Rs 17,300 crore ($2.8 bn) by September. It is seeking to emerge from a debt revamp programme by the end of March. The German unit's sale was to help achieve this.

"A share swap deal with PV Powertech would not impact the debt revamp the company is undergoing. Besides, it will help bond a long-term relationship with the Shanghvi family," says the person quoted earlier.

The government is targeting a five-fold boost to solar power capacity, to 100 Gw by 2022. In a separate move, the Gautam Adani-promoted Adani Enterprises has announced a 10,000 Mw solar energy park in Rajasthan, in a joint venture with the state government. With the government's push, more such projects are expected to come up in the country and Suzlon's acquisition of the solar panel maker will help it tap this market.