Second richest Indian Dilip Shanghvi, Managing Director of Sun Pharmaceutical Industries, has emerged as a white knight to bail out debt laden wind energy company Suzlon Energy.
Dilip Shanghvi Family and Associates (DSA) will invest Rs 1,800 crore in Suzlon for 23 per cent stake.
Suzlon promoter Tulsi Tanti's holding in the company will shrink to 24 per cent.
Suzlon said management control remains with the Tanti family by virtue of pooling arrangement for voting. DSA and Suzlon will also jointly invest to develop a 450-megawatt wind farm.
Shanghvi, as financial advisor, will also provide project-specific, non-fund based working capital facilities.
"While we believe Suzlon has the potential to emerge as a global leader in the renewable energy space from India, it will take substantial and sustained effort on part of the management team to achieve a significant operating performance improvement," said Shanghvi.
"We are convinced that the support from Dilipbhai Shanghvi and family will help in creating long-term sustainable value for our stakeholders," said Tulsi Tanti.
Shanghvi, who has acquired over a dozen assets in the past, has a proven track record of turning them around quickly. He had initially invested $40 million in Israel-based Taro Pharmaceuticals when Taro was facing working capital issues and debt. Later Shanghvi acquired the company in 2007 for over $470 milion, but later Taro promoter Barrie Levitt backed out of the deal, leading to many years of litigations in Israel and the US. Finally Sun acquired Taro in 2010.
For Shanghvi and family, renewables is not an alien arena. Shanghvi's son Alok, who works in Sun Pharma, has already started a solar panel making company named PV Powertech, along with a friend.