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Suzlon Energy, through subsidiary AE-Rotor Holding, has signed an agreement to sell its entire 26.06% equity stake in Belgium’s Hansen Transmissions International to ZF Friedrichshafen for around £115 million (around . 830 crore), the Indian wind turbine maker said on Monday.
The agreement is part of the offer by ZF International, a wholly-owned subsidiary of Germany’s ZF Friedrichshafen, to buy 100% in Hansen Transmission at 66 pence a share, valuing the entire transaction at £445 million. The offer price is at a 96% premium to Hansen Transmissions’ close on Friday on the London Stock Exchange. “This is in line with our strategy to optimise and strengthen our balance sheet,” Suzlon’s chairman and managing director Tulsi Tanti was quoted as saying. Suzlon Energy said that the “irrevocable” agreement with ZF International would lapse in certain circumstances, including if any other entity makes a firm offer to buy Hansen Transmissions at a price at least 12.5% higher than ZF International’s offer price.
The stake sale is at a substantial premium to Hansen’s share price and would be a positive for the cash-strapped Suzlon Energy. Shares of Suzlon Energy soared over 3% on Monday to end at . 54.50 on the BSE, driven by the news.
“Suzlon would have access to REpower’s cash of . 2,000 crore once the acquisition is completed. It is also likely to receive . 1,000 crore from a debtor in US. With the inflow from the Hansen sale, Suzlon Energy would have a much better cash position.
Suzlon Energy initiated the process to exit its holding in Hansen Transmissions in 2009 to raise funds to repay debt while sales accruals remained muted.
The Indian wind turbine major acquired gearbox maker Hansen in 2006, aimed at backward integration at a time when component supplies were in deficit.