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Suzlon Plans to Raise as Much as $500 Million, Sell Bonds

According to reports, Suzlon Energy Ltd. (SUEL) plans to raise as much as $500 million, including through a bond sale, to meet debt payments in June, its finance chief said.

India’s biggest wind turbine maker began talks with “large, international banks” four weeks ago about selling high-yield bonds, Chief Financial Officer Kirti Vagadia said today in a phone interview.

“All our overseas subsidiaries are practically unleveraged,” said Vagadia, who replaced former CFO Robin Banerjee last month. “We want to raise funds against those international assets.”

Suzlon owns Hamburg-based Repower Systems SE. Re-balancing debt across the group would help reduce interest payments, Vagadia said. In June, $358 million in foreign-currency convertible bonds mature. Suzlon isn’t renegotiating those with bondholders, he said.

The Pune, India-based company expects to complete the fresh fund-raising and to sell “non-critical assets” to meet obligations by June, Vagadia said. It also expects to see strong cash flows by then as 65 percent of orders tend to come in the first half of the year, he said.

Vagadia, when asked, said selling Repower or listing a stake wasn’t an option.

“I’ve said we want to sell non-critical assets,” Vagadia said. “By definition, Repower is our most critical asset. I think that answers the question.”

Suzlon shares reversed some of its earlier losses before closing down 4.3 percent at 21.35 rupees.

Suzlon completed its buyout of Repower in October 2011 after gradually increasing its stake over four years. Re-listing it makes no sense at this point, Vagadia said.

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