Suzlon Energy tanks 24% after report says deal with Vestas could fall apart

Shares of Suzlon Energy tanked as much as 24.47 per cent to Rs 3.95 intra-day during the afternoon deals on the BSE on Monday after reports suggested that the electrical equipment manufacturer could not crack a deal with Danish firm, Vestas Wind Energy, for stake sale.

At 1:45 pm, the stock was quoting Rs 4.43 per share, down 15.13 per cent, against a 0.3 per cent rise in the benchmark S&P BSE Sensex. The S&P BSE500, on the other hand, was up 0.2 per cent. Suzlon Energy is one of the constituents of the index. 

According to a report by TV channel, CNBC TV-18, the deal beween Pune-based wind turbine manufacturer and Vestas Wind Systems hit a roadblock due to a potential "valuation mismatch". Vestas' offer to buy promoter Tulsi Tanti and investor Dilip Shanghvi's stake for one billion euros expired on June 3 with no response from Suzlon.

Suzlon has been reeling under debt worth Rs 7,000 crore and was looking to sell the promoters' stake to pay off the debt. While Tulsi Tanti group owns 17.6 per cent in Suzlon Energy, Dilip Shanghvi owns 23 per cent stake as personal investments.

Vestas designs, manufactures, installs, and services wind turbines across the globe and has 101 GW of wind turbines in 80 countries, about 17 per cent of the total in the world. Pune-based Suzlon Energy has an installed wind capacity of 18,000 MW.

“The Company is exploring multiple options for debt reduction along with its lenders. However, we wish to submit that as a Company, we do not comment on the market speculation,” Suzlon Energy had said on February 22, 2019 on clarification on news report that Danish firm may buy controlling stake in the company.