The sale proceeds of Rs.340 cr will help it reduce long-term debt
Debt-laden wind turbine major Suzlon, on Saturday, said it had sold its Chinese manufacturing subsidiary to China Power (Tianjin) New Energy Development Company for $60 million (Rs.340 crore).
The two companies had signed a binding term-sheet for sale of the subsidiary, Suzlon Energy Tianjin, with the majority of its assets and liabilities for $60 million, the company said in a statement here. “The dynamics of the wind energy market have changed considerably over the past year, and we are re-aligning our strategy in the Chinese market with an agile, asset-light business model to achieve high growth and margins but with lower investments. We have decided to realign our business there, as reflected in this transaction,” Suzlon Group Chairman Tulsi Tanti said in a statement.
Suzlon, the world’s fifth largest wind power maker by installed capacity, has over Rs.10,000 crore in debt, out of which around Rs.6,000 crore in working capital loan and Rs.4,000 crore in long-term debt. This year, the company has a repayment obligation of $750 million, including $550 million in foreign currency convertible bonds. Out of this, it has already repaid $306 million worth of FCCBs early this month.
Mr. Tanti said the deal was in line with its previously announced strategy to dispose of non-critical assets to reduce the long-term debt.