Suzlon, the world’s fifth-largest wind turbine maker, is exploring the option of selling a large portion of its stake in Belgian company Hansen Transmissions, to raise money for retiring part of its Rs 12,000-crore debt. The company could also consider selling its entire stake in Hansen, according to people close to the development.
The Tulsi Tanti-controlled Suzlon, which owns 61.28% in Hansen, has appointed a merchant banker to advise it on the deal. The company is also heard to be currently evaluating four bids, mostly from strategic players, which it has received so far.
The stake sale is in addition to the option of a qualified institutional placement (QIP) of around Rs 2,000 crore, which Suzlon is exploring, as current market conditions are convenient for such an instrument. The current market cap of Hansen is pegged at around $1.6 billion, (about Rs 7,600 crore at current exchange rates) which would value Suzlon’s stake in the wind turbine and industrial gearbox maker at $980 million (about Rs 4,700 crore at current exchange rates). Since it’s a strategic stake, it is expected that Suzlon could get some premium to the prevailing market price from the Hansen stake sale.
The two moves together will help in reducing debt on Suzlon’s balance sheet, which comes to around Rs 12,000 crore, including bondholders. It may be mentioned that Suzlon had recently failed to recast covenants with some of its foreign currency convertible bond (FCCB) holders.
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