Suzlon suspends Rs 1,800 crore rights issue
Suzlon Energy, the world’s third-largest maker of wind turbines, has suspended its rights issue to raise Rs 1,800 crore ($360 million) due to falling stock markets around the globe.business Updated: Oct 27, 2008 21:14 IST
Suzlon Energy, the world’s third-largest maker of wind turbines, has suspended its rights issue to raise Rs 1,800 crore ($360 million) due to falling stock markets around the globe. The company, plagued by defects in its wind turbine blades exported to the US and Europe, has however said that the move will not affect its expansion plans.
The company also said it was suspending talks on the “domination” agreement with REpower. “In the context of the current market environment, both the parties have jointly agreed to suspend the process of negotiation of domination agreement for the time being,” it said.
The setback comes as Suzlon struggles to integrate Repower’s technologies into its own manufacturing facilities, said a Mumbai-based analyst who did not want to be quoted. “The key issue in the domination agreement with Repower was about the technology transfer from the German company. With the rights issue failing, the technology transfer remains in limbo,” said the analyst.
The money was to be used in buying additional stake in REpower Systems, the German maker of wind-turbines, which Suzlon bought out in May 2007 in partnership with Martifer SGPS SA.
The Suzlon scrip ended the day at Rs 46.95 on the Bombay Stock Exchange.