Suzlon Energy inches up amid volatility after pact to sell Senvion SE

Suzlon Energy rose 0.81% to Rs 17.33 at 9:46 IST on BSE after the company said it has signed a binding agreement with Centerbridge Partners LP, USA to sell Suzlon's 100% stake in its subsidiary Senvion SE at a deal valued at about Rs 7200 crore.

The announcement was made before market hours today, 22 January 2015.

Meanwhile, the S&P BSE Sensex was up 141.32 points or 0.49% at 29,030.18.

On BSE, so far 1.35 crore shares were traded in the counter as against average daily volume of 57.90 lakh shares in the past one quarter.

The stock was volatile. The stock surged as much as 7.91% at the day's high of Rs 18.55 so far during the day. The stock fell as much as 1.62% at the day's low of Rs 16.91 so far during the day. The stock had hit a 52-week high of Rs 36.80 on 12 June 2014. The stock had hit a 52-week low of Rs 9.36 on 19 December 2013.

The stock had outperformed the market over the past one month till 21 January 2015, advancing 34.61% compared with the Sensex's 5.54% rise. The scrip had also outperformed the market in past one quarter, jumping 54.86% as against Sensex's 8.7% rise.

The mid-cap company has equity capital of Rs 713.44 crore. Face value per share is Rs 2.

Suzlon Energy said that it has signed a binding agreement with Centerbridge Partners LP, USA to sell Suzlon's 100% stake in its subsidiary Senvion SE at a deal valued at euro 1 billion (approximately Rs 7200 crore) equity value in an all cash transaction and future earn out of upto an additional euro 50 million (approximately Rs 360 crore). The transaction is subject to regulatory and other customary closing conditinos. As part of the deal, Senvion will give Suzlon license for off-shore technologies for the Indian market while Suzlon wil give Senvion the S111-2.1 MW license for the USA market. The 100% stake sale of Senvion SE is in line with Suzlon's strategy to reduce the debt and focus on the home market and high growth market like USA and emerging markets like China, Brazil, South Africa, Turkey and Mexico, Suzlon said in a statement. The transaction is expected to be closed before the end of the current financial year, Suzlon said.

Mr Tulsi Tanti, Chairman, Suzlon Group said, "We are pleased to announce this development which is in line with our strategic initiative to strengthen our balance sheet. The proceeds would be used for debt repayment thereby reducing interest cost and augment business growth. We will focus on high growth markets like India, USA and other emerging economy markets. The Indian government's significant thrust on renewable energy offers a conducive policy framework to the sector which Suzlon is best equipped to capitalise. Suzlon will offer its wind and solar hybrid technology solutions to contribute towards achieving country's target of 'sustainable energy for all'. With our market leadershipo, right technology, proven project execution capabilities and best in class services, we are best positioned to tap the high growth potential in home market".

Stefan Kowski, Managing Director at Centerbridge said, "Senvion is a company with impressive technology and leading market positions. The global market environment for renewable energies is promising for a wind turbine manufacturer, particularly for one of the most experienced players in the industry with onshore and offshore capability. We are confident that Senvion will continue its track record and, together with the company's management, we look forward to supporting its continued development as a profitable and growing company".

Senvion SE, a wholly owned subsidiary of the Suzlon Group, is one of the world's leading manufacturers of onshore and offshore wind turbines.

Suzlon Energy reported a consolidated net loss of Rs 656.21 crore in Q2 September 2014, lower than net loss of Rs 782.37 crore in Q2 September 2013. Net sales rose 11.8% to Rs 5330.60 crore in Q2 September 2014 over Q2 September 2013.

The Suzlon Group is ranked as the world's fifth largest wind turbine manufacturer, in terms of annual installed capacity and market share in 2013. The company's global spread extends across Asia, Australia, Europe, Africa and North and South America with over 25,000 MW of wind energy capacity installed, operations across over 31 countries and a workforce of over 10,000.

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