Suzlon Energy Shareholders Approve Sale Of Offshore Wind Energy Subsidiary Senvion
Debt-ridden Sulzon Energy is expected to take probably the biggest measure to cut its huge debt as its shareholders approved the sale of a European subsidiary.
India’s largest integrated wind energy solutions provider Suzlon Energy will sell off Senvion, a Germany-based offshore wind energy technology provider, that it acquired in 2007. According to media reports Suzlon would incur a ‘minor’ loss on the sale of Senvion. The move by Suzlon comes amidst a slew of measures to reduce it debt.
Suzlon Energy has been having financial problems over the last few years especially since the previous government rolled back critical incentives to the wind energy sector. This led to Suzlon losing market share to other competitors like Gamesa, which has been the leader in the Indian market for the last 2 years. Suzlon is now planning to make a comeback as the government plans to increase the installed wind energy capacity by over 3-times by 2022.
The company has not reported profit for at least the last 5 financial years. Over the last five years, Suzlon reported the biggest loss of about $460 million in FY 2012-13. Loss during the last financial year was $142 million. And while the company has found some success in improving its balance sheet, the debt at the end of FY 2013-14 stood at around $2.3 billion.
The company is looking to take full advantage of the improving financial and regulatory environment for the renewable energy sector in India. The central government as well as several state governments have announced ambitious plans to increase the wind energy capacity. The central government will also open up the offshore wind energy sector and is expected to launch the National Wind Energy Mission soon.
Suzlon Energy has announced its own plans. Over the next 5-7 years the company plans to manufacture wind energy equipment equivalent to 11 GW and install 5 GW of wind power generation capacity. The company will invest $3.7 billion in the western state of Gujarat to develop 3 GW of renewable energy capacity, including 2 GW onshore and 500 MW each of offshore and solar power capacity.
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