Suzlon sells Chinese subsidiary to pay debts
Heavily indebted wind turbine maker Suzlon Energy, Ltd has sold its manufacturing subsidiary in China.
The Indian firm, the world’s fifth largest manufacturer of wind turbines, has sold its Chinese manufacturing subsidiary to China Power (Tianjin) New Energy Development Company for US$60 million.
The two companies signed a binding term-sheet for Suzlon Energy Tianjin. The sale is subject to requisite regulatory approvals.
Part of the proceeds is expected to go to paying-off the company’s massive debt estimated at US$1.9 billion. This huge debt is also increasing the company’s interest costs, which in turn is eating into its profitability. This interest cost has shot up to 20% in fiscal year 2012.
Suzlon has a cumulative installed capacity worldwide with of some 20,000MW in 28 countries.