* Centerbridge Partners agrees to buy Senvion
* Suzlon will use cash to pay down debts
* Shares fall 7.5 pct (Adds numbers on debt, analyst quote, updates shares)
By Tommy Wilkes and Devidutta Tripathy
NEW DELHI/MUMBAI, Jan 22 (Reuters) - Indian wind turbine maker Suzlon Energy Ltd said it had agreed to sell its German unit Senvion SE to buyout firm Centerbridge Partners for 1 billion euros ($1.16 billion), in an all-cash deal that will help the group reduce its debts.
The companies have signed a binding agreement, which also has a future earn out clause of an additional 50 million euros, they said in a statement on Thursday.
Loss-making Suzlon has been under pressure over the last few years due to a slowdown in global turbine sales and a debt pile that has grown to 165 billion rupees ($2.68 billion). It was forced to restructure $1.8 billion of debt after defaulting on a $200 million convertible bond redemption in 2012.
The company will use proceeds from the Senvion sale to cut its debts by 60 billion rupees, Suzlon Chairman Tulsi Tanti told TV channel CNBC TV18, and to focus on higher growth markets like India and the United States.
Shares in Suzlon opened up more than 4 percent on Thursday before falling sharply, and were changing hands 7.5 percent lower by 0931 GMT against a 0.2 percent rise in the benchmark .
"The driver of Suzlon's valuation was this company. What will remain, if you sell that?" said Daljeet S Kohli, head of research at brokerage IndiaNivesh. "It's like saying you sell your house to retire the home loan and say I am richer. The fact is that you are on the roads."
On Monday, Suzlon said it had not approved the sale of Senvion while on Jan. 7 the company had denied it was in talks with potential buyers, calling a media report "baseless and false".
Senvion, previously known as REpower Systems SE, was bought by Suzlon in a series of tranches totalling $1.4 billion that gave the Indian company full control in 2011.
Together with Senvion, Suzlon was the world's fifth largest wind turbine manufacturer. Suzlon's Tanti said ex-Senvion the company has an order book of 1,500 megawatts.
Centerbridge declined to comment on the deal but a source familiar with the transaction said roughly 550 euros would be put up by the private equity firm as equity. ($1 = 0.8617 euros) ($1 = 61.6700 Indian rupees) (Additional reporting by Arno Schuetze in FRANKFURT and Indu Lal in MUMBAI; Editing by Clara Ferreira Marques, Gopakumar Warrier and Himani Sarkar)