Monday, December 17, 2012

Will Suzlon Energy Ltd Sell REpower Ltd....??!!
Is Suzlon Energy Ltd going to sell a large stake, if not its entire stake, in wind turbine manufacturer REpower, which it acquired about five years ago? This still remains a moot question. 
Actually, Suzlon Energy Ltd’s debt problems began with the large REpower acquisition, and it is only fitting that this arm is sold to get out of the current financial mess.

But, having said that, it must also be noted that REpower is currently the company’s division that is performing reasonably well. Execution in the domestic wind power business has not been too satisfactory. And recent regulatory changes are making things worse for Suzlon Energy Ltd’s wind power business in India.

Therefore, it is obvious that the Suzlon Energy Ltd’s management isn’t eager to sell REpower Ltd.

However, it seems there is at last some light at the end of the tunnel:  
The Financial Institutions have already put the company in the CDR mechanism, and it is only  time that  the company gets  the necessary life blood to complete the orders in hand .

It has a  huge order book of around $ 7.5 billion or Rs.40, 957.50 Cr  and its debts are  nothing considering the total assets of the company and its ever growing order book.

In the short term, I therefore, reiterate a BUY on the scrip even at  Rs.18.90.