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Chennai, Aug. 2 Suzlon Energy Ltd, a leading manufacturer of wind turbines, plans to raise a total of Rs 5,000 crore through issue of various securities. It obtained the approval of its shareholders at the annual general meeting recently. Company officials have said that this is only an enabling provision and there are no immediate plans to raise the funds.

In the last financial year, Suzlon raised Rs 2,183 crore by issuing shares to qualified institutional buyers, after it obtained its shareholders’ approval in December 2007 to raise up to Rs 5,000 crore.

The company has said that it will use part of the funds to refinance the financial assistance it got from international lenders for acquiring Hansen Transmissions International BV and REpower Systems AG, and also to arrange funds for buying the shares of Martifer of Portugal and Areva of France in REpower Systems.

Suzlon acquired Hansen of Belgium, a gearbox manufacturer for wind turbines, in May 2006 for Rs 2,500 crore. In May 2007, it acquired a 36 per cent stake in REpower of Germany, a wind turbine manufacturer, for Rs 7,300 crore.

In June 2008, the company bought out the 30 per cent stake held by Areva of France in REpower for an undisclosed amount, taking its holding in REpower to 66 per cent. It has the option to buy out the stake held by Martifer in REpower.

According to the company, further issue of securities convertible into or linked to equity shares would provide a platform for it to meet its fund requirement and improve the financial leveraging.

The company has said it has substantial work orders on hand and expects to get new orders. Suzlon proposes to increase its capacity from 2,700 MW to 5,700 MW by the fourth quarter of FY09.

According to the 2007-08 annual report, Suzlon is establishing forgings facilities of 70,000 tonnes capacity and foundry facilities of 1,20,000 tonnes capacity, both of which are scheduled to begin commercial production in the third quarter of this financial year.

This is part of Suzlon’s efforts to have a better control over the supply chain as the wind turbine industry is facing supply chain bottlenecks. It aims to be a vertically integrated wind turbine manufacturer and is putting up production facilities for all key components.

Suzlon is optimistic on the prospects for the wind power industry with the cumulative global installed capacity expected to increase from 94,005 MW in 2007 to 287,940 MW in 2012.

It bases its outlook on the following factors: utilities are emerging as a force in the field of renewable energy generation as investing in this form of energy is an increasingly viable option; increased environmental awareness and government initiatives in the form of production tax credit and other such incentives; a growing offshore market; and repowering – replacing aged turbines with new, more efficient ones.

More Stories on : Outlook | Non-conventional Energy | Suzlon Energy Ltd

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