Mumbai: Danish firm Vestas Wind Systems is in talks with Suzlon Energy for a controlling stake, sources privy to the development said. Vestas is keen on buying out the promoter Tulsi Tanti and investor Dilip Shanghvi and launch an open offer for its shares as part of the deal, they said. Tulsi Tanti and family own 17.60 per cent stake in Suzlon Energy and in 2014, Dilip Shanghvi had picked up a 23 per cent stake in the company as part of his personal investments.
The sources suggest that talks are at a serious stage and valuations are being negotiated between Suzlon and Vestas. Lenders to the wind turbine manufacturer will play a critical role in the deal finalisation as debt reduction is the primary reason for the deal.
Suzlon has been fighting debt concerns for six years. The market capitalisation of the wind turbine manufacturer has eroded to around Rs 2,500 crore, while its debt stands at over Rs 7,000 crore. The company plans to reduce debt by 30-40 per cent in FY19, management had indicated earlier.
Recently, the company had to clarify investors’ concerns around pledged shares and loan default, “We wish to clarify that the company is regular in servicing its debt obligations including servicing obligations towards banks and others for the month of January 2019. The rumours about the company are baseless and we appeal to all the investors and stakeholders to not to believe the same,” Suzlon said in a filing to the stock exchanges.
“Suzlon needs to get fund infusion to avert a non-performing asset (NPA) situation,” an analyst said. Vestas spokesperson said, “Vestas’ strategy is based on organic growth and as we have said before on similar speculation, our industry-leading position means we are open to additional bolt-on opportunities to accelerate our growth strategy should such arise.”
Vestas is a global energy major which designs, manufactures, installs, and services wind turbines across the globe. It has 101 GW of wind turbines in 80 countries, about 17 percent of the total in the world. Pune-based Suzlon Energy has an installed wind capacity of 18,000 MW.
