Suzlon

Suzlon Energy Ltd. is a wind turbine supplier based in Pune, India. It was formerly ranked by MAKE as the world's fifth largest wind turbine supplier.[2] It has since dropped out of the Global top ten rankings (as of 2014) due to extensive losses and inability to repay debts.[3] The company's website claims to have over 17,000 MW of wind energy capacity installed globally, with operations across 18 countries and a workforce of over 8,000.[4] Despite financial issues, it continues to be a major manufacturer of wind turbines;[5] in 2016, the company posted a profit EBITDA after accruing losses over seven consecutive years.[6]

Suzlon Energy Ltd.
Public
Traded as
ISININE040H01021
IndustryRenewable energy
Founded1995 (1995)
FounderTulsi Tanti
HeadquartersOne Earth, Hadapsar,,
Pune, Maharashtra
,
India
Area served
Worldwide
Key people
  • Tulsi Tanti (CMD)
  • J.P. Chalasani (Strategic Advisor)
ProductsWind turbines
Revenue₹204.0286 billion (US$2.9 billion)[1] (2014)
Websitewww.suzlon.com
Suzlon generators behind a vintage gas pump at the Bluegrass Ridge Wind Farm in King City, Missouri

The company is listed on the National Stock Exchange of India (NSE:SUZLONEQ) and on the Bombay Stock Exchange (BSE:532667). Though once considered a favourable stock, and a favourite of the stock broker Rakesh Jhunjhunwala, it fell out of favour as the company posted continuous losses.[7] It fell from a high of Rs. 68.75 in 2010 to a low of Rs. 18.5 in 2014, with a single day drop of 10% in September 2014.[8] It continues to trade low at less than Rs. 3.5 per share in Sep-2019.[9]

Company structure

Suzlon is a vertically integrated wind power company. It makes and installs wind turbines, and manufactures blades, generators, panels, and towers in-house. It is integrated downstream and delivers turnkey projects through its project management and installation consultancy, and operations & maintenance services. Suzlon has offices, R&D and technology centres, manufacturing facilities and service support centres spread across the globe, with its head office in Pune, India. The company's larger offices, design and R&D teams are located in India, Germany, Denmark and The Netherlands. As per its website, Suzlon has fifteen manufacturing facilities and a workforce of over 8,000 employees globally.[10]

History

In 1995, founder Tulsi Tanti was managing a 20-employee textile company. Due to the erratic availability of power locally, and its rising costs, the highest business expenditure after the raw materials was electricity.[11] The cost of electricity also offset any profits made by the company.[12] After providing electricity for his own company, Tanti moved into wind energy production as a way to secure the textile company's energy needs, and founded Suzlon Energy.[13] Suzlon adopted a business model wherein clients would be responsible for 25% of the up-front capital investment and Suzlon would arrange the remaining 75% on loan. Initially, banks were hesitant to fund loans for this model, but by 2008, many Indian banks started financing wind power projects for Suzlon clients.[11]

In 2001, Tanti sold off the textile business; Suzlon is still actively run by Tulsi Tanti, now in the role of Chairman, Suzlon Group.

Rainbow behind the Suzlon WTG

In 2003, Suzlon got its first order in USA from DanMar & Associates to supply 24 turbines in southwestern Minnesota.[14] Also in 2003 Suzlon set up an office in Beijing.[11]

Suzlon Rotor Corporation in 2006 began producing the blades in Pipestone, Minnesota in the United States. Among its clients is Wind Capital Group.[15]

In the year 2006, Suzlon reached a definitive agreement for acquisition of Belgium firm Hansen Transmissions, specializing in gearboxes for wind turbines, for $565 million. In 2007, the company purchased a controlling stake in Germany's Senvion (then operating as REpower Systems) which valued the firm at US$1.6 billion.

In June 2007, Suzlon had signed a contract with Edison Mission Energy (EME) of US for delivery of 150 wind turbines of 2.1 megawatts in 2008 and a similar volume to be delivered in 2009. EME had an option not to purchase the 150 turbines due to be delivered in 2009, which it has chosen to exercise.

In November 2009, the company decided to sell 35% stake of Hansen for $370 million as part of its debt restructuring program, through placing new shares. It appointed Bank of America Merrill Lynch and Morgan Stanley as the managers and book runners for the same.[16][17][18]

In January 2011, Suzlon received an order worth US$1.28 billion for building 1000 megawatts of wind energy projects from the Indian branch of the Lord Swaraj Paul-owned Caparo Energy Ltd.[19]

In May 2011, Suzlon announced returning to profitability after the financial crisis of 2009 [20]

In October 2011, Suzlon sold its remaining 26.06% stake in Hansen Transmissions International NV to ZF Friedrichshafen AG for ₹8.9 billion (US$120 million). [21] In the same month, it also achieved full control of its German subsidiary REpower Systems (now Senvion) by acquiring the remaining 5% stake held by minority shareholders that resisted the takeover. The takeover was completed through the squeeze-out procedure by paying EUR 63 Million. [22]

It has to redeem 500 million worth of FCCB's (foreign currency convertible bonds) in 2012 in tranches of 300 million in June and 200 million in October respectively. In line with the previously announced strategy to dispose of non-critical group assets to reduce long-term debt, Suzlon Chairman said that Suzlon Energy, will sell stake in its China manufacturing unit to China Power New Energy Development Company Limited for 3.4 billion rupees ($60 million).[23]

On 30 November 2013 the Suzlon Group subsidiary REpower Systems (now Senvion SE) won an Engineering, Procurement and Construction (EPC) contract from Mitsui & Co (Australia) Ltd to deliver 52 wind turbines with a total rated output of 106.6 MW for the Bald Hills Wind Farm in Victoria, Australia.[24]

As of August 2014, Suzlon's debt was over ₹ 8000 crores.[25] On 22 January 2015, Suzlon announced the sale of Senvion SE, its wholly owned subsidiary, to Centerbridge Partners, a private equity firm in a deal valued at ₹ 7200 crores.[26] The deal is expected to ease Suzlon's debt burden.[26] In a further equity infusion, Dilip Shanghvi Family and Associates (DSA), run by Dilip Shanghvi, the founder and managing directory of Sun Pharmaceutical, agreed to purchase a 23 percent stake in Suzlon for a sum of ₹1800 crores.[27] The deal will see Tanti's holding shrink to 24 percent, but management control will still remain with the Tanti family.[27] Its total borrowings stood at Rs 11430.76 crore in FY16 from Rs 17810.96 crore FY15.[28]

On 17 January 2017, Suzlon Energy achieved 10,000 megawatts installed wind energy milestone in India. Suzlon's 10,000 MW of wind installation is capable of powering over 5 million households per annum and offsets approximately 21.5 million tonnes of carbon dioxide (CO2) emission annually which is equivalent to planting over 1500 million trees.[29]

Wind parks

Globally, Suzlon has installed over 17000 MW of wind power capacity in 18 countries.[30]

India

Suzlon crossed 11,000 megawatts of cumulative installations in India.[31] Suzlon has cumulatively added over 11000 megawatts of wind power capacity for over 1,700 customers in India across 40 sites in eight States. Suzlon accounts for nearly one-third of the country's total wind installations.[32]

Its notable installations in India include:

In 2012, Suzlon signed an Expression of Interest with the government of Karnataka to develop 2500 MW of wind power in the state between 2012 and 2017.[38]

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See also

References
  1. "Suzlon Annual Report 2013/14" (PDF). Archived from the original (PDF) on 12 December 2014. Retrieved 24 December 2014.
  2. Source: MAKE Report: Global Wind Turbine OEM 2013 Market Share.
  3. "Siemens Named Top Wind Turbine OEM For 2014: MAKE Report". North American WindPower. 9 March 2015. Archived from the original on 15 July 2015. Retrieved 18 July 2015.
  4. "Suzlon Company Profile". Suzlon official website. Archived from the original on 6 May 2016. Retrieved 2 January 2016.
  5. "Top 10 Wind Turbine Manufacturers in the World (2018)". BizVibe Blog. Retrieved 15 November 2018.
  6. Datta, Aveek (19 July 2016). "Suzlon: Riding the wind after first annual net profit in seven years". Forbes India. Archived from the original on 11 January 2018. Retrieved 11 January 2018.
  7. "Suzlon shares continue to fall; down 10%". Hindu Businessline. 22 September 2014. Retrieved 11 January 2018.
  8. "Suzlon shares continue to fall". Business Standard. Retrieved 11 January 2018.
  9. "Stock price - Suzlon energy". www.nseindia.com. NSE India. Archived from the original on 11 January 2018. Retrieved 4 September 2019.
  10. Company Profile: Suzlon Archived 6 May 2016 at the Wayback Machine
  11. Kumar, Nirmalya (2009). India's Global Powerhouses. Harvard Business Press. pp. 136–8. ISBN 978-1-4221-4762-7.
  12. Heroes of the Environment Archived 25 August 2013 at the Wayback Machine, Time, 17 October 2007, accessed on 26 December 2009.
  13. "India's 40 Richest". Forbes.com. 17 November 2006. Archived from the original on 27 July 2012. Retrieved 14 February 2015.
  14. Karmali, Naazneen (27 October 2006). "Wind Man". Forbes.com. Archived from the original on 14 January 2012. Retrieved 22 November 2011.
  15. Renewable energy world
  16. "सुजलॉन बेचेगी हैनसेन का 35% हिस्सा". Sharemanthan.in. Archived from the original on 17 September 2012. Retrieved 22 November 2011.
  17. "Suzlon: awaiting large orders - Money Matters". livemint.com. 2 February 2010. Archived from the original on 10 April 2010. Retrieved 22 November 2011.
  18. Business Standard. "Suzlon: Some breeze, finally". Business-standard.com. Archived from the original on 12 October 2012. Retrieved 22 November 2011.
  19. Yep, Eric (28 January 2011). "Suzlon Energy Bags $1.28 Billion Order - WSJ.com". Online.wsj.com. Archived from the original on 27 June 2015. Retrieved 22 November 2011.
  20. Suzlon Press Release of 14 May 2011 Archived 23 December 2012 at the Wayback Machine
  21. "Suzlon Energy to Receive $178 Million for Hansen Stake Next Week- Bloomberg". Mobile.bloomberg.com. 7 October 2011. Archived from the original on 14 May 2012. Retrieved 22 November 2011.
  22. Yep, Eric (28 October 2011). "Suzlon: Completed 'Squeeze-Out' Process of REpower Minority Shareholders - WSJ.com". Online.wsj.com. Archived from the original on 27 June 2015. Retrieved 22 November 2011.
  23. "Suzlon Group to Sell China Unit for RS 340 Crore". 23 June 2012.
  24. Suzlon to Supply 52 Turbines to Australian Wind Farm Archived 15 January 2016 at the Wayback Machine
  25. "Aim to repay debt, turn profitable by end of FY15: Suzlon". MoneyControl. 1 August 2014. Archived from the original on 16 February 2015. Retrieved 16 February 2015.
  26. "Suzlon to sell German unit to Centerbridge for €1 bn". Hindu Business Line. 22 January 2015. Archived from the original on 15 January 2016. Retrieved 16 February 2015.
  27. "Dilip Shanghvi takes 23 per cent stake in debt-laden Suzlon". Business Today. 14 February 2015. Archived from the original on 16 February 2015. Retrieved 16 February 2015.
  28. indiainfoline.com. "Suzlon | Suzlon to exit debt restructuring by end of FY17". Archived from the original on 14 January 2017. Retrieved 17 January 2017.
  29. Market, Capital (17 January 2017). "Suzlon Energy gains after achieving 10,000 MW installed wind energy milestone". Business Standard India. Archived from the original on 18 January 2017. Retrieved 17 January 2017.
  30. "Company Profile". Archived from the original on 6 May 2016. Retrieved 15 February 2015.
  31. Market, Capital (16 January 2017). "Suzlon Energy achieves 10,000 MW installed wind energy milestone". Business Standard India. Archived from the original on 18 January 2017. Retrieved 17 January 2017.
  32. "Suzlon Group crosses 22000 megawatts in wind power installations across the world" (PDF). Suzlon. 16 December 2010. Archived (PDF) from the original on 26 September 2012. Retrieved 15 September 2012.
  33. "Suzlon crosses 1 GW capacity at Jaisalmer park". Economic Times. 11 May 2012. Archived from the original on 15 February 2015. Retrieved 15 February 2015.
  34. Mishra, Lalatendu (6 November 2014). "Suzlon sets up world's tallest hybrid wind turbine in Kutch". The Hindu. Chennai, India. Archived from the original on 7 November 2014. Retrieved 15 February 2015.
  35. "Suzlon to complete Kutch wind farm in next four years, says CMD Tanti". The Indian Express. 6 November 2014. Archived from the original on 1 December 2014. Retrieved 15 February 2015.
  36. "Suzlon Energy faces serious debt crisis". Archived from the original on 15 February 2015. Retrieved 15 February 2015.
  37. "Among the clouds". Power Today. Power Today. Retrieved 15 February 2015.
  38. "Suzlon signs EoI to develop 2,500 mw of wind power capacity". Economic Times. 7 June 2012. Archived from the original on 15 February 2015. Retrieved 15 February 2015.

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