Suzlon to hike REPower stake via ‘squeeze out’ plan

Suzlon said that under Germany’s regulatory rules a shareholding of 95 per cent in a listed company allows the majority shareholder to “initiate squeeze-out proceedings” for minority shareholders. Suzlon,through its unit AE-Rotor Holding BV,has asked the board of REPower to begin the buy out of the minority shareholders. This will result in REPower being a wholly owned subsidiary of the company,but is subject to additional expenses,procedural steps,time limits and regulations.

Suzlon has 6.4 per cent of the market share among global wind turbines manufacturers and REPower has 3.4 per cent. After REPower becomes a fully owned unit,Suzlon will have 9.8 per cent of the world’s manufacturing capacity,making it the world’s third leading wind turbine maker in terms of market share,after Denmark’s Vestas Wind Systems A/S and GE Wind Energy,a unit of US-based General Electric Co.

The weak market,combined with large amounts of debt on its books,prevented Suzlon from completing its acquisition of REPower. Suzlon was forced to take refinancing measures,reduce working capital and sell its stake in Belgian gearbox maker Hansen Transmissions International. Recent months have seen a recovery in wind energy markets,driven by demand growth in emerging markets such as India and China. This was further boosted by the earthquake and tsunami in Japan earlier this year,which resulted in damage to nuclear reactors and forced a rethink about the safety of nuclear technology and the importance of renewables.