Moneycontrol Bureau
Shares of Suzlon Energy surged over 18 percent intraday on Monday despite increasing loss in December quarter. What is driving the stock is a deal with Sun Pharmaceutical founder Dilip Shanghvi.
Shanghvi has agreed to buy a 23 percent stake in Indian wind turbine maker Suzlon Energy for about USD 290 million.
The India's second-richest man will pay Rs 1800 crore through Dilip Shanghvi Family and Associates (DSA) for 1 billion new shares in Suzlon, issued by way of a preferential allotment. Shanghvi's investment firm and Suzlon will also form a wind farm joint venture for the development of 450 megawatt (MW) of wind farms, a company statement said.
Loss-making Suzlon has been under pressure over the last few years due to a slowdown in global turbine sales and a growing debt pile. It was forced to restructure USD 1.8 billion of debt after defaulting on a USD 200 million convertible bond redemption in 2012.
The deal will provide Suzlon with much needed liquidity and the company said it would also use the cash to tap opportunities in India and growth markets like the United States, China, Brazil, South Africa, Turkey and Mexico.
Meanwhile, the debt-laden wind turbine maker reported a widening of consolidated net loss at Rs 6,538.68 crore for the third quarter ended December 2014 on the back of sale of its overseas subsidiary Senvion.
Its total income declined marginally to Rs 4,977.18 crore during the October-December quarter as against Rs 5,052.2 crore in the third quarter of FY14. Last month, the company had sold Senvion to Centrebridge Partners LP for Rs 7,200 crore as part of its strategy to hive off non-core businesses and reduce debt burden of over Rs 17,000 crore.
At 09:38 hrs Suzlon Energy was at Rs 21.75, up Rs 2.60, or 13.58 percent on the BSE.
(With inputs from agencies)
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