IDFC PE in share swap deal

The infrastructure-focused investor is exchanging its holdings in SE Forge for a stake in parent company Suzlon Energy.

India’s Infrastructure Development Finance Company Private Equity (IDFC PE) is to swap its stake in portfolio company SE Forge for a share in its Bombay-listed parent company Suzlon Energy, according to a company filing to the exchange.

The deal will give the Mumbai-headquartered infrastructure-focused firm “a methodology through which we can look at liquidity”, S.G. Shyam Sundar, managing director at IDFC PE, told wire service
According to the terms of the transaction, IDFC PE will sell 4.123 million shares of SE Forge at INR10 each in return for 3.2 million fully paid-up equity shares of INR 2 each in Suzlon, equivalent to a 17.1 percent stake.

The Suzlon board has approved the deal which is currently pending shareholder approval. SE Forge will become a wholly-owned Suzlon subsidiary following the transaction.

SE Forge is a maker of wind turbines and large-scale foundry and forging materials. The company has facilities in Coimbatore, an industrial city in the Indian state of Tamil Nadu, and in Vadodara in the Indian state of Gujarat.

According to previous media reports, IDFC PE paid INR4 billion (then €58 million; $86 million) to pick up a 17 percent stake in SE Forge in September 2008. Since then, the stake has decreased significantly in value, according to media reports.

IDFC PE, a subsidiary of the Infrastructure Development Finance Company, was established in 2002. It is India's largest infrastructure-focused private equity manager with around $1.4 billion in funds under management. 

In June, the company set up IDFC Real Estate Investments, a private equity real estate funds management business, and hired Chetan Davé, the former managing director and chief executive of SUN-Apollo, to head the unit.