Debt-laden Suzlon today said its $1.2-billion sale of German arm Senvion to US-based VC fund Centrebridge Partners is at a “minor loss”, but will reduce the firm’s interest burden, free up liquidity and help it return to profitability next fiscal.

“The sales proceeds will be utilised for debt repayment, thereby reducing interest costs and augment the business growth,” Suzlon Group chairman Tulsi Tanti told reporters on a conference call from Davos, where he is attending the World Economic Forum summit.

Earlier in the day, the Pune-based wind turbine maker, which has been sitting over ₹16,500 crore of debt, said it has entered into a binding agreement with American distressed assets fund Centerbridge Capital Partners to sell Senvion for $1.2 billion (about ₹7,200 crore) in an all-cash deal to pare its debt.

Tanti said it is a “wise” decision to exit the business acquired in 2007 at €1.4 billion and constitutes as much 65 per cent of the business.

He asserted that he is “happy” at the valuation which is “reasonable” given the current market conditions and at par with peers.

Tanti also sought to clarify on the view that the company, which is under corporate debt restructuring process, has sold the asset at a discount.

Pointing to 20 per cent deprecation of the rupee against the euro over the past seven years, he said: “net-net it is a very minor loss, there is no loss to the company... There is some misunderstanding that there is a loss while selling this company, it is not true.”

He said the rupee was trading at 60 to the euro at the time of the deal, whereas now a euro fetches you ₹72.

Some analysts say that by selling Senvion, Suzlon loses one of the biggest revenue and profit centres for the group, which posted a loss of ₹924 crore in FY14 and ₹528 crore in the September quarter of this fiscal.

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