India’s Suzlon Energy (SUZLON.BO), a leader in the wind turbine business, reportedly had its wind blades rejected by REPower Systems in Germany because they did not meet quality standards.
According to the Wall Street Journal, Suzlon’s blade prototypes are being rejected and REPower is purchasing the blades from someone else. Suzlon won a contract to sell the blades to REPower a year ago. Suzlon is the world’s fifth largest wind turbine manufacturer, according to a BTM Consulting.
Suzlon denies that its blades were rejected, telling Reuters, “There is no blade concern at all.” and issued a statement that said “Suzlon is focused only on completing the project while ensuring adherence to high quality standards which is delaying the delivery.”
Oddly enough, Suzlon owns the majority of REPower, with a 74% stake in the company, but German law forces Suzlon to run the company “at an arms length” according to the Journal. As a result of the blade delays REPower has $8 million in losses, which Suzlon will have to pay for.
The Journal adds that the Suzlon has other problems. It’s spending $100 million to fix cracks in U.S., Europe and Brazil Turbine Blades. It will also owe $275 million in the next month to pay for its stake in REPower, and Suzlon is struggling to raise the money.
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