Suzlon Energy Ltd., the wind-turbine maker behind India’s biggest convertible bond default, will get less than expected for a stake in its Chinese manufacturing unit as it seeks to pay down debt.
Poly LongMa Energy (Dalian) Ltd. has made the first payment of a total $28 million for a 75 percent stake in the Tianjin-based unit, Suzlon said in a statement late yesterday. Suzlon had expected to divest the whole unit to China Power (Tianjin) New Energy Development Co. for $60 million last year.
Suzlon is struggling to manage debt racked up in overseas acquisitions and wants to raise $400 million through 15 asset sales by March 31. It’s in talks with bondholders after failing to pay $209 million in convertible notes in October and has another $120 million maturing in July.
The stock has lost 63 percent this year, the second-worst performer among renewable energy companies on the 95-member WilderHill New Energy Global Innovation Index. The shares rose 3.8 percent to 6.8 rupees as of 12:56 p.m. in Mumbai trading.
Suzlon didn’t provide a reason for the change in buyer or the unit’s reduced sale value. Group Chief Financial Officer Kirti Vagadia told analysts in February that its deal with China Power ran into delays with a lender to the unit and regulators.
The unit has 600 megawatts of annual capacity to produce turbine components including nacelles and rotor blades. Under the new agreement, Suzlon will continue to produce its 1.25-megawatt, 1.5-megawatt and 2.1-megawatt turbines in China for Poly LongMa.
Suzlon previously had planned to exit manufacturing in China, the world’s largest wind market.