EverPower Wind Holdings Inc., backed by British private-equity financier Guy Hands, plans to buy one of Illinois’ biggest wind farms from indebted Indian turbine-maker Suzlon Energy Ltd. (SUEL)
Suzlon acquired the Big Sky wind farm from Edison Mission Energy, the Indian company said today in a Bombay stock exchange filing, opening the way for a sale to EverPower approved by the U.S. Federal Energy Regulatory Commission on March 19.
A two-part deal is needed to free EverPower of any legal claims from a disputed loan between Suzlon and Edison Mission, according to a filing to the U.S. regulator by the companies.
EverPower, owned by Hands’s Terra Firma Capital Partners Ltd., would see wind capacity grow by almost 50 percent with the addition of the 240-megawatt project. The deal would also end a two-year effort by Suzlon, responsible for India’s biggest convertible bond default, to collect the $228 million loan it made to Big Sky to finance a turbine sale in 2009.
Suzlon and Edison Mission have been wrangling over the loan since at least September 2012 when the Indian turbine maker filed a lawsuit in New York to demand payment. The issue was complicated when Edison Mission filed for bankruptcy three months later because of falling energy prices.
Edison Mission said in February it was negotiating to trade its ownership in Big Sky for Suzlon waiving the loan. Suzlon would buy Big Sky for a nominal price and agreeing to settle its first priority mortgage claim, according to the U.S. filing.
Suzlon’s filing today didn’t provide the financial terms of its acquisition, while the U.S. submission also didn’t say how much EverPower plans to pay Suzlon for the farm. Suzlon has 120 days to pass on the asset to EverPower, according to the U.S. filing. Hands and Kirti Vagadia, Suzlon’s group head of finance, didn’t immediately reply to requests for comment.
Suzlon expects to recover about $90 million, less than half the amount of the turbine-financing loan, Vagadia said in February. The producer needs cash to staunch losses as it negotiates with bondholders after failing to repay $209 million of convertible debt in October 2012.
EverPower was bought for 443 million pounds ($738 million) in 2009 by Terra Firma Capital Partners Ltd., the third-biggest private-equity investor in clean energy, according to its website. Hands owns Terra Firma, according to the U.S. filing.