Suzlon Energy's total debt including the rupee and foreign currency stands at around Rs 16,000 crore.
Wind turbine maker Suzlon Energy has agreed to sell its German subsidiary Senvion SE to US-based investment firm Centerbridge Partners for 1 billion euro (about Rs 7,200 crore) in an all-cash deal to trim debt.
"Suzlon signs binding agreement with Centrebridge Partners LP for 100% sale of Senvion SE for 1 billion euro," the company said in a statement today.
The deal, which is subject to regulatory and other customary conditions, also has a future earn out clause of up to 50 million euro (Rs 360 crore), the statement added.
The proceeds will be utilised towards debt reduction and business growth in key markets like the US, India and other emerging markets such as China, Brazil, South Africa, Turkey and Mexico, Suzlon said.
Suzlon Energy's total debt including the rupee and foreign currency stands at around Rs 16,000 crore.
The transaction is expected to be closed before the end of the current financial year.
Also Read: Suzlon shares tank over 6% on deal to sell German subsidiary Senvion SE
"We are pleased to announce this development which is in line with our strategic initiative to strengthen balance sheet," Suzlon Chairman Tulsi Tanti said.
Senvion SE will give Suzlon licence for off-shore technology for the Indian market.
"The global market environment for renewable energies is promising for a wind turbine manufacturer, particularly for one of the most experienced players in the industry with onshore and offshore capability," Stefan Kowski, Managing Director at Centerbridge, said.
"Given the NDA government's very promising renewable energy sector programme in India, Suzlon is preparing itself to take advantage of it by lessening the debt in the balance sheet," said Debashish Mishra, Senior Director (Consulting) Deloitte Touche Tohmatsu India.
Suzlon Energy had renamed its subsidiary REpower as Senvion in 2013. REpower, which was founded in 2001, was acquired by Suzlon Energy in December 2009.
Following the announcement, shares of Suzlon plunged by 6% to Rs 16.15 on the BSE despite a positive opening.
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