Dilip Shanghvi to buy 23% Suzlon stake for Rs1800 crore - Livemint

A file photo of Dilip Shanghvi. Photo: Mint

Mumbai: Suzlon Energy Ltd , world’s fifth largest wind turbine manufacturer, on Saturday said it has signed definitive agreements with Dilip Shanghvi Family and Associates (DSA) for equity investments of Rs1,800 crore in the company.

Suzlon Energy is promoted by Tulsi Tanti .

Post allotment, DSA shareholding will be 23% shares (based on current shareholding), while the Tanti Family will hold 24% shares.

Management control remains with Tanti Family by virtue of pooling arrangement for voting, the wind turbine maker said in a statement.

“This financial investment is in sync with the Prime Minister’s long term vision and immense potential of the renewable energy market. While we believe Suzlon has the potential to emerge as a global leader in the renewable energy space from India, it will take substantial and sustained effort on part of the management team to achieve a significant operating performance improvement,” Shanghvi said.

Sanghvi said he has strong faith in the leadership of chairman Tanti to achieve this and will continue as financial investors.

Sudhir Valia , part of DSA, said despite having strong fundamentals, during last couple of years Suzlon’s performance was impacted by macro headwinds and liquidity constraints.

“We believe that our financial investment through equity infusion and facilitating working capital will enable the company to tap large opportunities in the renewable energy sector. We will be making an Open Offer as per regulatory requirement,” Valia said.

DSA and Suzlon will form equal joint venture with for wind farm development business, the statement said. The joint venture will develop 450 MW wind farms within a stipulated period of time.

DSA will also assist in providing incremental project specific non-fund based working capital facility to Suzlon for execution of the wind farm project.

DSA will also provide credit enhancement to the lenders of Suzlon for additional project specific working capital facilities.

Tulsi Tanti, chairman — Suzlon Group, said all the strategic initiatives are extremely crucial and will pave the way for growth.

“ These bold steps will strengthen our capital structure permanently, enabling significant deleveraging and liquidity to ramp up volumes rapidly. We are convinced that the support from Dilipbhai Shanghvi and Family will help in creating a long term sustainable value for our stakeholders,” Tanti said.

Tanti said Suzlon is poised to enter FY16 with a strong liquidity position to tap the opportunity available in India as well as key growth markets like USA, China, Brazil, South Africa, Turkey and Mexico.

Amit Agarwal chief financial officer of Suzlon Energy said these initiatives will result in sizeable debt reduction, savings on interest expense and will provide the necessary liquidity to boost operations.

Last month,Suzlon Group had signed a binding agreement with Centerbridge Partners LP, USA to sell 100% stake in Senvion SE, a wholly owned subsidiary of the Suzlon Group. The deal is valued at EUR 1 billion (approximately Rs7200 crore) equity value in an all cash transaction.