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Chennai, June 15 Suzlon Energy Ltd, a leading wind turbine manufacturer, has said it is evaluating various alternatives regarding its shareholding in Hansen Transmissions, a Belgium-based gearbox producer.

“This may or may not lead to Suzlon disposing of some or all of its stake in Hansen to a third party,” Suzlon said.

In a communication to the stock exchanges on Monday, Suzlon said these considerations were at an early stage and “may or may not lead to any transaction.”

Suzlon acquired Hansen Transmissions in March 2006 for about Rs 2,500 crore. Hansen makes gearboxes for the wind energy industry.

Suzlon, through a subsidiary, holds 61.28 per cent in Hansen. It raised about £290 million through an IPO for Hansen on the London Stock Exchange in December 2007 and sold 10 per cent in the Belgium-headquartered company in January 2009 to specialised investment firm Ecofin Ltd for £73 million. The IPO proceeds were to be used for expanding Hansen’s gearbox manufacturing capacity from 7,300 MW (of gearbox capacity) to 14,300 MW through plants in India and China.

According to a recent investor presentation, a copy of which is available on Suzlon’s Web site, Hansen will help Suzlon develop a long-term growth driver for its component business. Suzlon, through another subsidiary SE Forge, is setting up forging and machining capacity at plants in Gujarat and Tamil Nadu.

The presentation says that Hansen plugs a gap in Suzlon’s supply chain for gearbox and technology. The company’s plan is to source key components for the gearboxes from India and China, with SE Forge supplying forged and cast steel parts.

Hansen supplies gearboxes globally to four of the five largest wind turbine manufacturers and it had revenues of €609 million for the year ending March 31, 2009, with net earnings of €45 million.

Suzlon is considering selling a part or the entire stake in Hansen to mainly help it reduce its consolidated debt, which stood at Rs 12,000 crore as of December 31, 2008.

The company has repeatedly said that it is examining various options to raise funds and the promoters recently sold a small part of their stake in Suzlon, the money from which was to part-finance the acquisition of Martifer’s stake in REpower of Germany.

Suzlon has drawn up a working capital reduction plan in association with consultants AT Kearney, through which it hopes to free up Rs 1,000 crore of cash flows.

Suzlon’s shares were down nearly 2 per cent on the NSE on Monday to close at Rs 116.55.

More Stories on : Mergers & Acquisitions | Power | Suzlon Energy Ltd

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