DSA to invest Rs 1,800 cr in Suzlon; take 23% share

DilipShanghviFamily and Associates (DSA) has signed agreements with Suzlon Group,the world’s fifth largest wind turbine maker, for equity investments of Rs 1,800 crore in Suzlon.

Post allotment, DSA’s shareholding will be 23 per cent (based on current shareholding), while the Tanti Family will hold 24 per cent and management control remains with Tanti Family by virtue of pooling arrangement for voting, Suzlon said. Suzlon will raise Rs 1,800 crore by way of preferential allotment of 100 crore new shares to DSA.

DSA & Suzlon will form an  equal joint venture for wind farm development business. The joint venture will develop 450 mw wind farms within a stipulated period of time. DSA will also assist in providing incremental project specific non-fund based working capital facility to Suzlon for execution of the said project, Suzlon said.

DSA will also provide credit enhancement to the lenders of Suzlon for additional project specific working capital facilities. This move will help Suzlon in getting much needed working capital financing support and will be a catalystfor volume ramp up, Suzlon said. “This financial investment is in sync with the PM's long term vision and immense potential of the renewable energy market. While we believe Suzlon has the potential to emerge as a global leader in the renewable energy space from India, it will take substantial and sustained effort on part of the management team to achieve a significant operating performance improvement. We have strong faith in the leadership of Tulsi Tanti to achieve this and will continue asfinancial investors," Dilip Shanghvi said.
"Despite having strong fundamentals, during last couple of years Suzlon's performance was impacted by macro headwinds and liquidity constraints. We believe that our financial investment through equity infusion and facilitating working capital will enable the company to taplarge opportunities in the renewable energy sector. We will be making an Open Offer as per regulatory requirement," SudhirValia, part of DSA, said.

Capital structure

"All the strategic initiatives are extremely crucial and will pave the way for our growth. These bold steps will strengthen our capital structure permanently, enabling significant deleveraging and liquidity to ramp up volumes rapidly. We are convinced that the support from Dilip Shanghvi and family will help in creating a long term sustainable value for our stakeholders," Suzlon Group chairman Tulsi Tanti said.
DH News Service