Debt-laden wind turbine maker Suzlon today reported a widening of consolidated net loss at Rs 6,538.68 crore for the third quarter ended December 2014 on the back of sale of its overseas subsidiary Senvion.
The company had reported a loss of Rs 1,075.25 crore in the corresponding period a year ago. Its total income declined marginally to Rs 4,977.18 crore during the October-December quarter as against Rs 5,052.2 crore in the third quarter of FY14.
"The huge loss during the quarter is on account of the notional loss to the extent of around Rs 6,000 crore on the sale of our overseas subsidiary Senvion last month," the company's Chairman Tulsi Tanti told PTI here today. Last month, the company had sold Senvion to Centrebridge Partners LP for Rs 7,200 crore as part of its strategy to hive off non-core businesses and reduce debt burden of over Rs 17,000 crore.
"Most of the proceeds of this deal will be used to pay off our debt. Besides, we are also looking at selling stake in SE Forge, another non-core business," he said. However, he did not disclose further details on how much the company is expecting from the sale of subsidiary. "It is too premature to talk about this.
But we will be using the funds raised through the sale for repaying our debt," Tanti said. The company has also sold stake in its manufacturing capacity in China as well as in US-based Big Sky wind farm. Meanwhile, the company has also signed definitive agreements with Dilip Shanghvi Family and Associates (DSA) for equity investments of Rs 1,800 crore in Suzlon Energy.
Post allotment, DSA shareholding will be 23 per cent shares (based on current shareholding), while the Tanti Family will hold 24 per cent shares. Management control will remain with Tanti family by virtue of pooling arrangement for voting. "All the strategic initiatives are extremely crucial and will pave the way for our growth.
These bold steps will strengthen our capital structure permanently, enabling significant de-leveraging and liquidity to ramp up volumes rapidly," he said. The proceeds of both the transactions are expected to be received before March 31, he added. Both Suzlon and Sanghvi will form a joint venture to develop 450 MW with farm, a move that will mark the latter's foray into the renewable energy business.
Besides, the Sanghvi Family and Associates will provide project specific non-fund capital for two years, which will be utilised for execution and capacity utilisation, Tanti said.
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