The world's fifth-largest wind turbine maker Suzlon Energy today said it has divested a 10-per cent stake in its wholly-owned Belgian subsidiary AE-Rotor Holding BV to London-based specialised investment firm Ecofin Limited, for an undisclosed sum.

AE-Rotor Holding makes wind turbine gearboxes.

The sale will help Suzlon raise funds to pay fund the purchase of Potugese firm Martifer's 22.48-per cent stake in German wid power firm REpower. It has been scouting for funds to raise its stake in REpower, after it deferred its Rs1,800-crore ($367 million) rights issue in October because of the freeze in the capital markets.

It was forced to negotiate a  revised payment schedule with the Martifer Group. As per the new terms, Suzlon will pay Martifer approximately €65 million in December 2008, €30 million in April 2009 and final tranche of €175 million in May 2009.

Upon completion of this transaction, Suzlon will reach ownership level of approximately 91 per cent in REpower and Martifer will no longer hold a stake in REpower.

As a  consequences of the sale of  67.01 million shares, Suzlon's stake in Hansen will reduce to to 61.28 per cent, while that of Ecofin, which already held a 1,62-per cent stake in the Belgian firm,  would rise to 11.62 per cent.

Ecofin has undertaken not to dispose of the shares acquired from Suzlon until after 30 June 2009, though the lock-in is renounceable under certain circumstances.

Under the terms of the agreement Suzlon has the right to appoint two non-executive directors to the board of Hansen for so long as its shareholding in Hansen is a minimum of 26 per cent, while Ecofin has the right to nominate one such director for so long as Ecofin's shareholding in Hansen is a minimum of 8 per cent. However, Ecofin has indicated that it does not currently intend to exercise this right.

This right is renounceable at Ecofin's option within three months following completion of the transaction in exchange for Suzlon releasing it from the lock-in obligation.

Suzlon is ranked as the world's 10 largest manufacturer with over 10.5-per cent of global market share in 2007 and 50-per cent share of the Indian market for the last nine years.