Apr 04, 2012 02:40 PM IST | Source:

Suzlon to raise USD 40 million via sale of wind farm assets

Suzlon Energy said on Wednesday it will raise around USD 40 million (Rs 200 crore) via sale of a block of wind farm assets.

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Moneycontrol Bureau

Suzlon Energy said on Wednesday it will raise around USD 40 million (Rs 200 crore) via sale of a block of wind farm assets.

The wind farms are located across India, with majority of the assets in Tamil Nadu. The transaction is scheduled to be completed by mid-May 2012 after completion of due diligence and requisite approvals.

"This is a modest but important step forward in our strategy to optimize our capital structure and meet our repayment obligations this year," CFO Kirti Vagadia said.

Suzlon's FCCB (foreign currency convertible bonds) deadline is fast approaching and it may face USD 389 million in bond redemptions if investors holding the FCCBs don't choose to swap them for shares.

Suzlon shares have been under pressure in the last few months over concerns on its ability to repay debt this year. The stock, which currently trades around Rs 25, and hit a 52-week low of Rs 17.20 in Jan, is at 65-70% discount to the conversion price of FCCBs.

HSBC last month said it expects Suzlon to fall short by Rs 750 crore in June, when its first tranche of FCCB payments is due. The company is expected to face a shortfall of Rs 3,000 crore in meeting its entire repayment obligations, it said.

Suzlon's Vagadia, however, is more upbeat, banking on a strong order pipeline.

Suzlon said its order-book was highest ever at USD 7.5 billion as of February, with strong execution pipeline for fiscal 2013.

"In addition to divesting non-core assets, we believe our consistently improving business performance and outlook, particularly our strong revenue visibility for FY13, puts us in a strong position as we begin the new fiscal," Vagadia said.

Suzlon spooked the market last week when it announced the resignation of its then CFO Robin Banerjee.  Vagadia, while being in the hot seat as the new CFO of Suzlon Energy, will retain his earlier position of group finance head. The company said Robin Banerjee is leaving to take position outside the group.

Suzlon shares were down 1.8% at Rs 25.15 on NSE in noon trade on Wednesday.

Nachiket Kelkar

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