A Suzlon executive said the funds were raised through debt and internal accruals but refused to divulge specific details.
Earlier, Suzlon had shelved plans to raise Rs 1,800 crore (Rs 18 billion) through a rights issue to fund the acquisition as stock markets plunged in the midst of a global credit crisis. Suzlon also dropped its plans to set up a tower manufacturing facility in India that was to cost Rs 669 crore (Rs 6.69 billion) thus, reducing its capital expenditure burden for the year to about Rs 930 crore (Rs 9.3 billion).
This acquisition is part of Suzlon's deal with French energy major Areva and Martifer the two major shareholders in REpower at the time of its buyout two years ago for euro 1.35 billion (about Rs 7,314 crore). As per that agreement with Martifer then, Suzlon had to complete the deal before May 2009.
Earlier this month, Suzlon and the Martifer Group entered into an agreement on a revised payment schedule for Martifer's stake in REpower.
As per the terms, Suzlon has to acquire the stake in three tranches by paying Euro 65 million in December 2008, Euro 30 million in April 2009, and the final tranche of Euro 175 million in May 2009. This will take Suzlons ownership in REpower to approximately 91 per cent from the current 66 per cent.
In October, Tulsi Tanti, chairman and managing director of Suzlon, said the company has cash reserves of about Rs 1,700 crore, and has met all its repayment commitments until then. "Suzlon closely monitors and maintains our leverage position, not allowing it to exceed a ratio of 1:1 and the net debt:equity ratio of the group also stands below 1:1," he had said.
Suzlon's share prices closed at Rs 60.80 at the Bombay Stock Exchange (BSE) today, up 0.66 per cent from the close of trading the previous day. In early January this year, its shares were valued at Rs 2,300 per share, but slumped to the lowest at Rs 36.30 in the first week of December.
Suzlon will commission 19 wind turbines in Nicaragua
Suzlon Energy will soon commission 19 wind turbines worth $90 million in Nicaragua in Central America.
The order, being executed through Suzlon Wind Energy, a European subsidiary of Suzlon, was for setting up a 40-MW capacity network of windmills. This is the first order for Suzlon in Nicaragua.
The 19 turbines of 2.1 MW capacity each have been set up at the Ometepe Island near Lake Nicaragua, close to two volcanoes named Concepcion and Maderas, said sources.
A Suzlon spokesperson said the turbines would start production within a few weeks. The project is being developed by Arctas Capital Group LP of Houston, Texas.
Suzlon recently ran into trouble in the US after complaints of its turbines installed at wind farms of Deere and Co were not producing enough power due to technical issues such as inability to adapt to the US power grid.
Further, Edison Mission Energy said that some of the wind turbines supplied by Suzlon were suffering from blade-cracking problems and the company had to introduced blade retrofitting and compensation programme worth Rs 590 crore (Rs 5.9 billion).
The windmills will save about $9 million a year in fuel costs at current prices for Nicaragua and will contribute 6 per cent of its total energy needs, according to an Associated Press news report, quoting Nicaraguan Energy Minister Emilio Rappaccioli. Wind Energy is expected to reduce Nicaragua's dependence on oil-based energy to 3 per cent by 2013.
Currently, geothermal power from volcanoes, hydroelectric power generated by rivers and sugarcane-based ethanol provide 34 per cent of Nicaragua's power requirements.