ET reported that Belgium based Hansen Transmissions, in which Indian wind turbine major Suzlon Energy holds a 26% stake, will sell its industrial gearbox making unit to Japan's Sumitomo Heavy Industries in an all cash transaction.
Hansen Transmissions said that "The proposed transaction values Hansen Industrial Transmissions NV at EUR 75 million on a cash and debt free basis, before costs that will be incurred and borne by Hansen Transmissions in connection with the restructuring of HIT prior to completion of the proposed transaction."
Proceeds from the deal would be used by Hansen to repay debt. Hansen said the sale of the industrial gearbox unit, called Industrial Transmissions NV, which accounts for almost 16% of the company’s revenues, is aimed at streamlining operations in order to focus more on its core business of manufacturing wind gearbox.
Hansen also plans to reduce its wind turbine gearbox manufacturing capacity by 1,100 MW, from 8,700 MW as on September 30th 2010, by discontinuing operations at its Edegem plant.
It said that "This reduction in capacity will help reduce the level of overcapacity in Hansen Transmissions' remaining facilities and is reflective of the continued volatility and uncertainty in the global wind energy market."
Hansen's performance has been plagued by poor sales amid low demand from the wind energy market, even as debt on its book remained high.
Hansen's revenues in the year ended March declined 12.6% to EUR 532.4 million. The company's net financial debt stood at EUR 128.8 million as on March 31st 2010, 4% higher than a year ago.
Suzlon Energy's subsidiary, AE Rotor Holding, sold a 35.22% stake in the Belgium based gearbox maker through secondary market deals for USD 370 million in November. Suzlon has stated that it plans to sell the balance stake to exit its holding in Hansen completely.
Mr Krishnakant Thakur, a Mumbai-based analyst with Quant Broking, said that "Suzlon is clearly keen to exit Hansen, but they are waiting for the right valuations. The exit from the industrial gearbox business by Hansen may help command better valuation for the company."
Suzlon Energy had acquired Hansen Transmissions in 2006, with the aim of backward integration at a time when component supply fell short of demand. High debt and poor sales have forced Suzlon Energy to put its holding in Hansen on the block.
(Sourced from www.economictimes.indiatimes.com)
