Suzlon raises $552 million in equity issue to reduce debt
19 Dec 2007
Mumbai: Wind turbine maker Suzlon Energy has raised $552 million by issue of shares to repay loans and finance its acquisition of Germany's REpower.
The issue, amounting to 3.8 per cent of the company's equity capital, attracted investors from around the world, the company said in a statement.
The issue was managed by DSP Merrill Lynch and Citigroup.
"This strategic move will help us strengthen our balance sheet, improve gearing and give us the additional impetus to reach our growth targets," Tulsi Tanti, chairman of the company said.
The company's €1.2 billion ($1.7 billion) acquisition of REpower this year and a €465 million purchase of Belgian gearbox maker Hansen Transmissions International NV last year increased debt to 0.75 per cent of equity, straining Suzlon's balance sheet.
The share sale will cut Suzlon's debt to Rs5,275 crore, Tanti said.
As many as 25 investors comprising roughly 60 per cent Indian financial institutions and rest foreign investment companies bought Suzlon shares.
Suzlon owed banks and financial institutions Rs10,353 crore as of September 30, according to the company's share sale document filed with market regulator Securities and Exchange Board of India.
Suzlon proposes to use the proceeds of the equity issue for capital expenditure, working capital needs, loan repayment and the acquisition of REpower.