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Last Updated : Dec 26, 2012 04:58 PM IST | Source: Moneycontrol.com

Suzlon promoter sells 2% stake to facilitate CDR, shrs fall

The promoters of Suzlon Energy, led by chairman Tulsi Tanti, on Wednesday sold 3.75 crore shares amounting to about 2.11 percent stake in the wind turbine maker for Rs 63 crore. This stake sale is to facilitate its corporate debt restructuring admitted by banks last month.

 
 
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Moneycontrol Bureau


The promoters of Suzlon Energy, led by chairman Tulsi Tanti, on Wednesday sold 3.75 crore shares amounting to about 2.11 percent of company's paid-up capital in the wind turbine maker for Rs 63 crore. This stake sale is to facilitate its corporate debt restructuring admitted by banks last month.


Suzlon shares slipped over 3 percent to Rs 17.35 on NSE post the announcement.


"As communicated earlier, the company has started the process to comprehensively address its liabilities, inter alia, through the corporate debt restructuring mechanism. As part of this process, the promoters of the company are required to infuse certain funds into the company upfront for successful implementation of the CDR scheme," Suzlon said in a notice to stock exchanges.


With this stake sale, promoter group's holding in the company will come down to 50.65 percent of the paid-up capital.


The promoters say they will infuse the funds in the company at the earliest, which will then be used for debt reduction.


Suzlon Energy has a debt of Rs 11,000 crore, most of which was accumulated to acquire German REpower Systems and a stake in Belgium's Hansen Transmissions International. The company sold its share in Hansen in 2011 to "deleverage the balance sheet."


A few years ago, riding on the boom in renewable energy investment Suzlon expanded fast and raised funds for the acquisitions via foreign currency convertible bonds. However, the boom soon turned into gloom as the financial crisis hit global markets.


It has already defaulted on its part repayment of FCCBs in October, after overseas bondholders refused to give Suzlon a four-month extension for the same.


The company's loans getting admitted to the CDR cell last month has paved the way for lenders to chalk out a bailout package in consultation with the management and thereby try and normalise the delayed repayment schedules. 


In its flash report wherein the initial details of CDR process are charted out, Suzlon mentioned a number of avenues assuring future cash flows. These include "desired contribution" of Rs 250 crore from the promoters, Rs 300 crore reduction in fixed expenditure in 2013-14, and about Rs 2,800 crore by way of stake sale by March 2015, among others.


In September, the company launched legal proceedings against a unit of Edison International, one of its customers, to recover payments of USD 208 million. 


Many experts say Suzlon will at some time have to sell its stake in REpower Systems, a prized asset when acquired in 2009. The company has already told banks it is keen to sell stakes in some of its other arms like Suzlon-Tianjin based in China and SE Forge to raise funds.

State Bank of India, IDBI Bank, Bank of Baroda, ICICI Bank, Axis Bank and Punjab National Bank are among the big banks who have given loans to Suzlon.



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First Published on Dec 26, 2012 12:50 pm
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