Suzlon Sells Chinese Assets

Suzlon Energy has reported that it has sold 75% stake in its Chinese subsidiary Suzlon Energy Tianjin to LongMa Energy (Dalian) for USD 28 million (Rs 175 crore). As per the agreement, LongMa Energy would take over the management and would lead the marketing and sales activities of of Suzlon Energy Tianjin. Suzlon Energy however would continue to hold 25% stake in this subsidiary and would act as a technology partner.

The debt ridden turbine maker has been looking to sell its stake in Chinese business for long time now but finally it has come over and sold it. The subsidiary has actually been sold at quite a less valuation but the money that is coming is very important for the company as it needs to bring promoters contribution in the company and make sure that the company has enough liquidity.

Shares of the company in this year have dived down 63% this year itself and from the yearly high of Rs 27, Suzlon shares are down by 75%. The investor sentiment has been weak on the stock for many years due to its failed acquisition of RE Power which lead to company reporting huge losses and defaulting on the FCCB repayment.

Recently company has been admitted to debt restructuring but that too has not improved the investor sentiment. We have been of the opinion to exit the counter over the poor performance of the company. We continue holding the same view.