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Jan 6, 2009

Suzlon Sells 10% Stake In Hansen Transmission

Suzlon Energy, the world's fifth largest wind turbine maker, will sell 10 per cent of its stake in Belgium-based subsidiary Hansen Transmission for nearly Rs 600 crore, to funds managed by Ecofin, a London-based specialised investment firm. The company will use majority of the proceed to fund its acquisition of stake in another Suzlon subsidiary, Germany based REpower Systems AG. The balance will be used for Hansen's expansion plans in India and China, said sources close to the development. Suzlon did not disclose the size of the deal.


Last week, Suzlon increased its stake in REpower to 73.71 per cent by paying ¤65 million (close to Rs 447 crore) to Portugal's Martifer SGPS SA, which owns 22.4 per cent stake in the German wind power manufacturer. Earlier, Suzlon had shelved its plans of raising Rs 1,800 crore through a rights issue to fund this acquisition, considering the prevailing negative sentiment in the stock market due to global credit crisis and financial turmoil. Suzlon also dropped its plan to set up a tower manufacturing facility in India at Rs 669 crore, to reduce its capex burden.



Following the completion of the acquisition, Ecofin will have a voting and economic interest in Hansen of approximately 11.62 per cent and Suzlon Group's holding will reduce to 61.28 per cent from the current over 72 per cent, said a Suzlon press release. As per the agreement, Ecofin will not sell the shares acquired from Suzlon until June 30, 2009. Ecofin can nominate a non-executive director to the Hansen board, but Ecofin currently do not intend to exercise this right, said Suzlon. Ecofin is an investment firm specialising in the utility and infrastructure sectors with over $4.5 billion worth of assets under management.



It had acquired Hansen, a leading wind turbine gearbox manufacturer, for $645 million in an all-cash deal in 2006. The London Stock Exchange (LSE)-listed Hansen had raised about Rs 2,300 crore through an initial public offering to fund its expansion plans in India and China. Hansen is constructing a Rs 1,550-crore integrated manufacturing plant for wind turbine gearboxes at a special economic zone in Coimbatore and a similar facility in China. Hansen is also expanded its manufacturing facility in Lommel, Belgium, at an investment of ¤180 million.

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