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Apr 27, 2012, 09.30 PM IST | Source: Reuters

Suzlon eyes up to $500m bonds to repay debt

Wind turbine maker Suzlon Energy is working with international banks to raise USD 300 million to USD 500 million in overseas bonds to repay debt maturing this year, its group chief financial officer said on Friday.

Suzlon eyes up to $500m bonds to repay debt

Wind turbine maker Suzlon Energy is working with international banks to raise USD 300 million to USD 500 million in overseas bonds to repay debt maturing this year, its group chief financial officer said on Friday.

Suzlon, owner of Germany-based REpower, needs to repay foreign currency convertible bonds of $360 million in June and another $207 million in October.

"We are confident of meeting our debt obligation," Kirti Vagadia told Reuters by telephone. He said high-yield bonds will be raised in time to repay the debt, without giving a timeline or the names of the banks the company was working with.

Suzlon will leverage cash flows and assets of its international business to raise fresh debt, he said.

Suzlon's foreign currency bonds maturing this year have conversion prices of 76.68 rupees and 97.26 rupees per share, far above Suzlon's current share price, making them unattractive for bondholders to convert into shares.

Suzlon's shares, valued at $755 million, have lost nearly 60 percent in a year, partly on concerns about the company's ability to repay its debt. At 0930 GMT, Suzlon shares were down 4.93 percent to 21.20 rupees.

The consolidated net debt for the company at the beginning of the year was 117.90 billion rupees and its net debt to equity ratio was 2.1.

Shares in Suzlon and many other renewable energy companies, once darlings of investors, have struggled since the global financial crisis of 2008.

Suzlon does not plan to sell or list REpower to raise funds to repay debt, nor is Suzlon founder Tulsi Tanti looking at selling a stake or issuing new shares, Vagadia said.

"REpower is not for sale," Vagadia said, calling media reports on talks with potential buyers "speculative".

"It would be very strange for us to list (REpower)," he said, referring to the efforts made for several months at buying out all other shareholders of the Germany-based firm. Suzlon delisted REpower last year, four years after first buying into the company.

(Editing by Tony Munroe)

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