The Hindu Business Line : Price of Suzlon Energy rights issue in six weeks

The price of the Suzlon Energy Ltd rights issue of about Rs 1,800 crore would be decided in about six weeks. The company is awaiting clearances from the Foreign Investment Promotion Board for this.

The board has already adopted a resolution to the effect. Money raised from the issue would be used for buying a stake in Martifer, a Portuguese construction major, which holds 22.48 per cent stake in German wind power company, REpower.

In May 2007, Suzlon had acquired REpower for euro 1.35-billion (about Rs 7,314 crore). Martifer was a major shareholder in REpower and had partnered Suzlon in the bid to acquire a stake in the company.

Suzlon has an agreement with Martifer for buying the stake which is to be completed by December 15. It will consolidate Suzlon’s total holding in REpower to aabout 90 per cent.

Talking to Business Line, Mr Kirti Vagadia, Chief Financial Officer, Suzlon, said the company had decided to raise funds through a rights issue after exploring other options such as QIBs and FCCBs, “We found the rights issue to be the best option for us,” he said.

Mr Tulsi Tanti, Chairman and Managing Director of the company, in a media release said: “The issuance of shares on rights basis to our shareholders will strengthen the capital base of the company. This is a key step to striking the right balance in the leverage position of the company and to fuel the growth of our business,” he said.

Suzlon also announced that IDFC Private Equity has taken a 17.1 per cent stake at Rs 400 crore in Suzlon-subsidiary, SE Forge Ltd (SE Forge). The company specialises in large foundry and forging materials with manufacturing facilities in Coimbatore and Vadodara. After the dilution, Suzlon Energy’s holding in SE Forge would be 82.9 per cent, the release said.

The move is aimed at establishing a separate identity for SE Forge. It would allow the company to grow with a business plan to cater to the demand for specialised components for the wind industry and other sectors outside of the wind energy sector with a dedicated professional management.

During Monday’s trading on the BSE, the stock hit a 52-week low of Rs 150.20. At the closing of the trading hours on the BSE, the stock was traded at Rs 153.45, down by 12.19 per cent over the previous close of Rs 174.75

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