MUMBAI: Fears that the loss-making Suzlon Energy may default on repayment of foreign currency convertible bonds worth $569 million have been aggravated after the resignation of Robin Banerjee, who was an integral part of the company’s fund mobilisation initiatives as the chief financial officer.
Analysts are linking the CFOs exit to the company’s approaching deadline to repay foreign currency convertible bondholders $360 million in June and $209 million in October. They believe that chances of the company defaulting on the FCCBs are very high given the low cash flow and inability to raise funds. The chances of the company’s defaulting are high now, analysts added.
“The CFO quitting at this point of time is a negative signal because the company has been going through prolonged problems. Suzlon has had shuffling in senior management even earlier at crucial times and that increases uncertainties,” said Sanjeev Zarbade , vice-president (PCG Research), Kotak Securities.
In a text response to ET’s query, Banerjee said that he has joined pharmaceutical packaging company Bilcare as deputy managing director and group chief officer. He was unavailable for further comments. Suzlon has appointed Kirti Vagadia, who headed finance at group level, and is believed to be a close aide of the promoters, as the chief financial officer.
Suzlon declined to comment on specific question from ET, but said “given the company’s improving performance, impressive order inflow, potential collection of funds from a specific customer, and the progress we are making with the sale of non-core assets , we continue to believe we will meet our obligations in full.”
Suzlon said that Banerjee’s resignation was his “personal decision” . “This was a step that was planned well in advance, and timed at the end of the fiscal year for maximum continuity and minimising any disruption ,” a Suzlon spokesperson said.