Debt-ridden Suzlon Energy is looking to list its 100 percent owned German subsidiary REpower on the London Stock Exchange this year. IPO size is likely to be around USD 600-750 million, with Suzlon diluting 40-50 percent of its total stake.
This pegs REpower’s expected valuation at USD 1.2 billion. Sources say Suzlon Energy will use the proceeds from the IPO to repay German banks and domestic lenders. REpower owes as much as 750 million euros to German banks, who have ring-fenced the company’s finances.
This has been Suzlon’s biggest challenge as the wind turbine maker is unable to access the Germany subsidiary’s cash reserved to repay its debt. Suzlon's total debt stands at Rs 14,155 crore, of this, Rs 9500 crore is getting restructured under the Corporate Debt Restructuring (CDR) cell.
The company had repaid its first tranche of FCCBs worth USD 360 million in July 2012. It is understood that the company is now looking to settle another USD 500 million worth FCCBs with the bondholders.
Suzlon has been reporting losses for the past 3 years Suzlon Energy had acquired REpower in 2007 for Rs 8000 crore.
The German subsidiary accounts for nearly 40 percent of Suzlon’s total order book of USD 7.1 billon. Key bankers like SBI had earlier suggested that the company merge REpower with itself to reduce debt.
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