8/12/2019 In the Wind Power Industry

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Negotiation(ye kaisi musibat)

Suzlon Energy is known for its aggression. And, a lot of it can be directly attributed to itsChairman and Managing Director Tulsi Tanti who started the company in the mid-1990s. . Thecompanys lenders are working on restructuring the over Rs 10,000 crore of debt Suzlon has onits books. Much of Suzlons debt had to do with two major and ambitious acquisitions it madeone was REpower Systems of Germany, a wind turbine manufacturer with capability to make

offshore wind turbines. acquisition of Repower will help the company boost its global marketshare by 50% to 9% of the global wind energy market.However, it was the REpower acquisitionthat has been weighing it down . Suzlon entered into a bidding war for the first part of the stake-buy in the German wind turbine manufacturer, whose technology it hoped to acquire and sell.German law made it difficult for Suzlon to do this, because of which it had to increase its stakebeyond 90 per cent. It now owns about 94 per cent of REpower. Suzlon had discussed with itslenders, as part of its corporate debt restructuring package, to take over the loans REpower hasobtained from German banks and include them in the CDR. . The crash of the financial servicesfirm Lehman Brothers in September 2008 resulted in a global economic crisis, from which theUS and Europetwo of the largest wind power markets, at least for REpowerhave not yetrecovered. This has added to Suzlons woes.

FrankfurtSuzlon Energy Ltd. has held initial talks with potential buyers for its German wind-turbine unit REpower Systems SE as the Indian power-equipment company faces pressure fromcreditors worried about its maturing debt, several people familiar with the matter

The Indian company, which completed the purchase of REpower for around EUR1.8 billion lastyear after initially taking control of the company in 2007, is reluctant to sell the unit with whichit is spearheading its international growth, these people added.Due to mounting pressure from itscreditors, however, Suzlons chief executive Tulsi Tanti has met several potential bidders,among them General Electric, its German engineering rival Siemens AG, and French power andtransport equipment supplier Alstom SA the people said. One person said Suzlon has opened

REpowers data roomto allow potential bidders to undertake due diligence.

Bidders were not willing to meet Suzlons target price of EUR1.5 billion and more .Valuationsof renewable-energy assets have collapsed in recent years. European wind-turbine makers likeREpower and bigger rival Vestas Wind Systems were grappling with a deteriorating market asextra supply and looming competition from Chinese makers have put downward pressure onprices, while pressure on government finances has put wind-energy subsidies at risk in Europeand the U.S.

there was also tension between REpowers management and Suzlon because the Germancompany felt its growth was being held back by its Indian parents lack of deep pocketscompared with some rivals which put REpower at a disadvantage in bidding on big projects.

Suzlon had consolidated gross debt of 137.05 billion rupees ($2.75 billion) at Dec. 31. Thecompanys current market capitalization is about EUR822 million.

The Indian companys most pressing problem is more than $500 million in foreign-currencyconvertible bonds which mature later this year, according to Citigroup. The pressure pointcontinues to be the FCCB repayment$360 million of FCCBs was due in June 2012 and $209

8/12/2019 In the Wind Power Industry

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Negotiation(ye kaisi musibat)

million of FCCBs in October 2012, cash-raising options were selling a stake in REPower orlisting the business, Citigroup said.

Mumbai: Changing their minds for the fourth time in a little over two months, the board ofGerman wind turbine company Repower AG switched allegiance, asking shareholders to accepta 1.34 billion (Rs7,638 crore) offer from Suzlon Energy Ltd.Suzlon has been battling Areva SA of France for the German company and had recentlyincreased its offer to 150 a share, 10 per share higher than what Areva had offered. BothSuzlon and Areva also own stakes in Repower.