Suzlon Energy: Announcement of buying a new company, the expenditure will be more than Rs 600 crore, the impact will be visible on the stock.
Suzlon Energy will buy Renom Energy, the country’s largest multi-brand operation and maintenance service provider in the renewable energy sector. In the meeting, the company’s board has approved the purchase of 76 percent stake in Renom Energy in more than one installment. Suzlon Energy will buy this stake for Rs 660 crore. After completion of the purchase, Renom Energy will become a subsidiary of Suzlon Energy. Suzlon Energy has given this information after the market closed. The impact of this news can be seen on the stock on Wednesday.
What information has the company given?
The company has said that it will first buy 51 percent stake in the target company and this purchase will be completed within 3 months of the agreement. Under this, Suzlon Energy will purchase 15.3 lakh shares for Rs 400 crore. This deal will be in cash.
The remaining 25 percent shares will be acquired within 18 months of purchasing the majority stake and this deal will be for Rs 260 crore. The company will have the option to acquire this stake through cash or share swap. Renom Energy is the country’s largest independent service provider. The company provides operation and maintenance services for solar and wind turbine technologies.
Renom Energy has assets under management of 2.5 GW, of which 1782 MW is from wind, 148 MW from solar. The turnover of the company in the last financial year was Rs 213 crore. According to Suzlon Energy, the purpose of this purchase is to increase its reach in India’s wind energy service segment. Suzlon clarified that after the acquisition, Renom will continue to operate as an ISP managed by an independent board.
