Suzlon May List Senvion Unit by March as Turbine Demand Recovers

Jun 02, 2014 12:48 am ET

June 2 (Bloomberg) -- Suzlon Energy Ltd., Asia’s second- biggest wind-turbine maker, may sell shares for the first time its German unit by the end of March as demand recovers.

Suzlon is looking at options in the “international capital and debt markets,” to reduce its dependence on high-cost Indian loans, including an initial public offering of its Senvion SE unit, said Kirti Vagadia, group head of finance. Suzlon would keep majority control of Senvion, whose valuation may get a boost from the demand recovery, he said.

“We would be targeting this financial year,” Vagadia said in a phone interview yesterday, without giving an amount or place of listing. “The Western market is moving in the right direction with IPOs almost happening on a weekly basis.”

Suzlon, which caused India’s biggest convertible bond default in 2012, is leading gains in global wind-energy stocks on expectations a five-year extension from bondholders and a new, pro-clean energy Indian government will push it toward recovery. The Pune-based company’s shares more than doubled this year, compared with a median 32 percent gain among its global peers, according to data compiled by Bloomberg Industries.

The shares rose as much as 10 percent to 24.20 rupees and traded at 23.80 rupees as of 9:40 a.m. in Mumbai. The benchmark S&P BSE Sensitive Index climbed 0.5 percent.

Senvion, formerly known as Repower Systems SE, makes offshore wind turbines. Senvion is a “marquee” asset, and European capital markets are showing an appetite for renewable- energy companies again, Vagadia had said in April.

Suzlon, which hasn’t reported a profit since 2009, said group loss narrowed to 6.03 billion rupees ($102 million) in the fiscal fourth quarter from 19.1 billion rupees a year earlier, according to an e-mailed statement late on May 30. Sales rose to a two-year high of 65.8 billion rupees.

Orders almost tripled in high-margin markets including India, Brazil and South Africa to 723 megawatts in the year ended March 31, Vagadia said. The company is also benefiting from making equipment to order rather than carrying inventory and streamlining its product portfolio.

Suzlon Survival Bets Rewarded as Bond Pact Reached: India Credit NSN N56UDI6S973H<GO> Suzlon May Break Even for First Time Since 2011 on Bond Deal NSN N5356N6JTSEE<GO> Suzlon Climbs After German Unit Gets $1.2 Billion in Funding NSN N3RG2B6JTSEJ<GO> To contact the reporter on this story: Natalie Obiko Pearson in New Delhi at npearson7@bloomberg.net To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net; Andrew Hobbs at ahobbs4@bloomberg.net Indranil Ghosh, Andrew Hobbs