Suzlon Energy said it has agreed to sell German unit Senvion to US private-equity firm Centerbridge Partners for $1 billion (Rs 7,200 crore). The Indian wind-turbine maker plans to use the proceeds from the allcash deal to reduce debt and focus on growth.

The company aims to expand in India, the US, China and Brazil, Suzlon Chairman Tulsi Tanti told reporters on Thursday from Davos, where he is attending the World Economic Forum. ET had reported about the transaction earlier in the week.
The deal includes an earnout – a future payment based on the company achieving certain goals – of up to $50 million.

The Pune-based company, the world’s fifth largest wind turbine manufacturer, said Senvion will give it licence for off-shore technologies for the Indian market. Senvion will get licence from Suzlon on certain wind turbines for the US market.

Suzlon said the unit’s sale is in line with its “strategic initiative to strengthen our balance sheet”. Repayment of loans will reduce the company’s interest cost and augment business growth, it said. The government’s significant thrust on renewable energy offers a conducive policy framework to the sector which Suzlon is best equipped to capitalise on, said Chairman Tanti.

Interest payment has been a major drag on the loss-making company for some time, even as it was also hurt by a slowdown in the global wind-energy market. Lenders had forced the company to restructure debt, after it defaulted on a bond redemption in 2012. The lenders had demanded also that the company bring in its own funds.

Tanti had told ET last week that Suzlon was aggressively looking to raise funds to support its growth strategy and retire debt as despite getting project-based funding from its lenders, it needed cash to capture the Indian wind-energy market.