Mumbai: Debt-laden wind turbine maker Suzlon on Wednesday said it has sold 75 percent stake in its Tianjin-based China arm to Poly LongMa Energy for USD 28 million (over Rs 177 crore), after putting it on block for more than a year.
Suzlon had entered China, the world's largest wind energy market, in 2006. This divestment is a part of Suzlon's strategy to monetise assets as it battles huge debt.
Suzlon, the world's fifth largest wind turbine maker with over 22,500 MW installed capacity in over 30 countries, had expected a valuation of USD 60 million when it had put Suzlon Energy Tianjin on the block.
Suzlon in a statement said the first tranche of the payment has already been completed.
"This is an important step forward for our future business in China. With this, we monetise an asset we have built up from 2006, and through our partner, Poly LongMa Energy, maintain our strong presence in the world's largest market, which remains strategically important for us," Suzlon Group Chairman Tulsi Tanti said.
The Pune-based company, which had a consolidated net debt of Rs 13,705 crore as on June 30, plans to raise nearly USD 400 million by selling its non-core assets across the world.
Soon after the Rs 9,500-crore debt recast in January this year, Suzlon identified as many as 15 non-core assets, mostly in overseas markets like China, and the US among others, to monetise in a phased manner.
The China divestment has also to do with the stiff competition it has been facing from local companies there, making the project unviable financially.
Following the sale, which was in the works for over a year now, Suzlon has formed a 25:75 joint venture with Poly LongMa Energy under which the Tianjin-based Chinese firm will take over the management and sales, while Suzlon will remain the technology partner, responsible for manufacturing and quality, Suzlon said.
The China plant rolls out the S66-1.25 mw, S82-1.5 mw and S88-2.1 mw turbines. Poly LongMa Energy is into conventional as well green energy investments.
Suzlon is also planning to sell stake in its forging business SE Forge.
Suzlon had got a lifeline from its lenders in January with Rs 9,500 crore debt restructuring. As part of the debt recast, Suzlon's promoters had infused Rs 125 crore. The CDR also involved company divesting over 33 percent stake to banks.