Suzlon to buy stake in German firm

New Delhi: Suzlon Energy, India’s largest wind turbine maker, will buy the 22.48 per cent stake in Germany-based REpower through a combination of cash and debt. The acquisition will be completed by May next year, Suzlon Chairman Tulsi Tanti said.

The Indian wind energy major had in September agreed to buy the equity stake from Portugese company Martifier for euro 270 million. At present, Suzlon holds 66 per cent stake in REpower.

“It was originally scheduled for May. We had accelerated it to December, but we are going with the original schedule,” Tanti said on the sidelines of the World Economic Forum’s India Economic Summit.

He, however, did not divulge details of how much debt would be required and from where he planned to borrow.

Last month, Suzlon suspended a $360 million rights issue as markets and sentiments across the world tumbled. The company had planned to use the proceeds from the issue to partly fund the acquisition of Martifier’s stake in REpower.

Suzlon had originally bought 36 per cent stake in REpower. It raised this to 66 per cent after acquiring 30 per cent stake in the German company in June this year.

Suzlon's share price on the Bombay Stock Exchange has dropped to a low Rs 54.40 on Monday after touching a high of Rs 2,300 on January 9. The company's share price fell 0.27 per cent today.

The company also said the global slowdown had affected it. “We are currently using our cash accruals and existing debt. We see banks starting funding again in January for our expansion projects,” he said.

He said the current order book of the company was at Rs 15,000 crore for 2,500 Mw projects.

With bank funding the company sees orders for wind turbine generators increasing from January, Tanti said.

Suzlon also said it plans to invest in solar energy but again did not disclose likely investments.

“We have identified sites in Gujarat and Rajasthan,” he said, adding that roughly 10 acres of land is required for generating 1 Mw solar power generation.

The company may also set up the solar energy projects in the land it uses for its wind farms. Setting up wind mills is land intensive.