Suzlon Energy Sells Part Of Wind Energy Farm For Rs 200 Crore

MUMBAI: Loss-making Suzlon Energy has sold a part of its wind energy farm for $40 million ( Rs 200 crore) to an undisclosed private utility and plans to divest stake in its components business to raise funds to repay debt, the wind turbine maker said.
The deal is expected to be completed by May. Proceeds from the deal would be used to pay its foreign currency convertible bondholders $569 million in the next seven months, which includes the first round of payment of $360 million due in June.
“This is a modest but important step forward in our strategy to optimise our capital structure and meet our repayment obligations in this year,” Kirti Vagadia, chief financial officer, said in a statement.
In India, Suzlon typically sets up wind farms and sells them, after which the company only operates and maintains the assets for the customer. Of the total capacity set up by the company, Suzlon owns only around 60 MW spread across five states, of which it has sold almost the entire capacity, company sources told ET. “The next round of fund raising would see divestment in our components business,” a company official said.
Analysts have expressed concerns over a likely default on payment of debt by Suzlon as its cash reserves have eroded and sales continue to be muted. Adding to the company’s woes, Suzlon’s hopes of recovering payments of $200 million from client Edison Mission were thrashed after the latter said it would not be able to make the payment until February next year.
“In addition to divesting these non-core assets, we believe our consistently improving business performance and outlook, particularly our strong revenue visibility for FY13, puts us in strong position as we begin the new fiscal,” Vagadia, said.
Shares of the company remained under pressure over concerns of a default and closed at Rs 25.15 on the Bombay Stock Exchange, down 2%.