Wind turbine manufacturer Suzlon Group has divested 75% of its stake in its China-based manufacturing subsidiary, Suzlon Energy Tianjin, for $28 million or R177.5 crore. The stake was bought by Chinese conglomerate Poly LongMa Energy (Dalian). Suzlon Group will continue to hold the balance 25% stake in the venture.
“With this joint venture, we monetise an asset we have built up from 2006, and through our partner, Poly LongMa Energy, maintain our strong presence in the world’s largest market, which remains strategically important for us. The new joint venture will be very well positioned in China, and offer the potential to explore exports as well,” Suzlon Group chairman Tulsi Tanti said.
Suzlon is currently under corporate debt restructuring with as much as R9,000 crore worth loans which were restructured. “While this deal has taken time and changes to fructify, we believe this achieves the best possible balance for the group and our stakeholders, including our customers, vendors, lenders and employees,” Tanti said.
Poly LongMa Energy will lead the marketing and sales operations in China, with Suzlon acting as technology partner and manage the manufacturing and quality for the venture.
“This stake sale is part of the overall restructuring programme towards making the company a leaner organisation,” said a source within Suzlon. “Revenues from this Chinese subsidiary had reduced considerably and scale of business had also reduced. We may want to maintain the 25% holding in the company to maintain a foothold in the Chinese market,” he said.