Sun Pharma's Dilip Shanghvi may enter wind energy biz with a stake in Suzlon

Dilip Shanghvi, promoter and managing director of Sun Pharmaceutical Industries and ranked the second richest Indian with a net worth of about $18 billion, is reportedly in talks with Tulsi Tanti’s Suzlon Energy to acquire a stake in the debt-laden wind turbine maker.

A report in the Economic Times today said that Shanghvi’s brother-in-law Sudhir Valia, who is a director in Sun Pharma as well as Lakshdeep Investments & Finance, will provide Rs 4,000 crore which Suzlon will use to meet its working capital requirement.

An earlier Business Standard report had said Shanghvi’s son Alok is also in talks with Tulsi Tanti for a possible merger or stake purchase by the latter’s company, PV Powertech, that presently makes solar energy panels. The deal is expected to be a share swap deal, in which the PV Powertech promoters will get stake in Suzlon.

The deal will not only help Shanghvi expand into the wind energy sector but will also enable Suzlon to retire its debt of Rs 17,300-crore as well as enter the solar energy sector. While the Company Act says renewable energy and wind turbine generators qualify as corporate social responsibility activity in India, the Modi government has also   re-introduced policies that allowed wind power projects to benefit from accelerated depreciation (tax incentives). In fact, the renewable space is one of the key focus areas of the new government.

In January, Suzlon sold its German unit, Senvion SE, to Centerbridge Partners for $1.2 billion in cash, to pare debt. The company plans to pay off about Rs 6,000 crore from the proceeds of the sale of its German business in January.

Loss-making Suzlon has been under pressure over the last few years due to a slowdown in global turbine sales. It was forced to restructure $1.8 billion of debt after defaulting on a $200 million convertible bond redemption in 2012.

The company at the time had said it would focus on the home and high-growth markets.