UPDATE 1-India's Suzlon to use cash and debt to pay Martifer

(Adds details, quotes)

By Devidutta Tripathy

NEW DELHI, March 30 (Reuters) - Indian wind turbine maker Suzlon Energy (SUZL.BO) will use cash and debt to buy a stake in its REpower RPWGn.DE unit from Portugal's Martifer (MARTI.LS) Chairman Tulsi Tanti said on Monday.

Tanti said while the world's fifth-largest wind turbine maker would consider all options to raise funds for the deal, there were no plans to sell a stake in Suzlon to private equity firms.

"For that, a very clear plan is there... We have a large working capital in our system and we are converting this working capital to cash and that will be partly utilised," he said, adding some of the deal would be funded through bank loans.

Suzlon owns 77.7 percent of German wind turbine maker REpower RPWGn.DE. In December, a revised payment scheduled was agreed for Suzlon to buy Martifer's stake, which on completion will give Suzlon 91 percent of REpower.

"Our obligation is for the Martifer payment, 205 million euros ($270 million)... on top of that we don't have any further obligation," Tanti said, adding there were no plans to again reschedule the payment to Martifer.

"That's what our commitment is and we have to complete that. There is no such discussion," he said.

Tanti said the company was not looking to sell a stake to private equity to finance the deal.

"No such plan is there... (but) we have to explore all fund raising options as and when the company gets good opportunities."

Tanti said Suzlon was expected to post a net profit in the March quarter, the final of its fiscal year, after posting a loss of 590 million rupees ($11.5 million) in the December quarter.

"It should be a profit naturally. Fourth quarter is normally 40 percent of our annual business and we are doing extremely well," he said.

He expected industry sales growth to be flat in 2009 before a recovery in 2010 when he expected sales to rise 20-25 percent. ($1=0.76 euro=51.2 rupees) (Editing by John Mair)