Suzlon Energy, the debt-laden wind-turbine manufacturer, is keen to sell its forging and foundry company, in which it invested Rs 1,000 crore, and component units and office complexes worth about Rs 1,000 crore as it exits non-core areas and continues its fund-raising drive.
"We are in the process of divesting stake in our forging company, SE Forge. If and when we get good valuation, we will exit as forging and foundry are not our core business," Suzlon Chairman Tulsi Tanti told ET. "We are not in any pressure to sell it." The forging plant is in Baroda and the foundry plant is in Coimbatore. Suzlon invested Rs 1,000 crore in the wholly owned company and expects valuations "accordingly," he said.
"The process is going on and we are working on it since last one year. We are not getting the right buyer and pricing, but now the company is doing extremely well because the domestic market is looking good," Tanti said. The latest plan follows the euro 1billion sale of German unit Senvion and a Rs 1,800 crore investment by India's wealthiest man, Dilip Shanghvi, which is helping the firm repay debt of aboutRs 17,000 crore.
"We are focused on profitably rationalising all aspects of our overall business. Our main business is to manufacture wind turbines, which we want to focus on, so we are looking at selling our non-core assets, which comprise 3-4 manufacturing units which produce components that are no longer a key part of our new product profile and are also looking at selling some of our office complexes," a senior company executive said.
He said the company wants to focus on rotor blade and wind turbine manufacturing and sell units that make towers, generators and forging equipment.
"This entire divestment can be done as a complete business-...while office complexes can be sold separately to better realise their real-estate value. In total, we are hopeful of raising Rs 1,000 crore through this entire process," he said.
He said Suzlon was in no hurry for the sale. "We are in a comfortable position cash-wise. Also, our lenders are on board with this plan and we are talking to potential investors and are hopeful of clinching a deal by the next two financial quarters," he said. In recent years, Suzlon has faced a sharp slowdown in local and global turbine sales due to the economic downturn, removal of tax concessions in India, high interest burden and stiff competition from Chinese companies.
Consequently, its debt burden has been rising. It has had to restructure its debt after it suffered India's biggest convertible-bond default in 2012. Tanti had earlier told ET that the company was looking to aggressively raise funds to capture the Indian wind energy market.