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Suzlon shares fall on bond repayment extension plea

According to reports, shares of India’s largest wind turbine maker Suzlon Energy today declined 4% to close at Rs 16.45 on Bombay Stock Exchange  after the company sought four extra moths to redeem bonds.  The scrip touched a low of Rs 16.25 in intra day trade.

Suzlon has issued zero-coupon foreign curency convertible bonds(FCCB) worth $200 million which are due next month. Following its inability to tie  up the requisite funds, the company is meeting bondholders on October 10 to seek their approval to extend the maturity by four months to February 11, 2013.

On Tuesday the company issued a statement requesting FCCB holders four extra months for redemption. The company said it was in process of closing various financing measures and “drive alignment between all stakeholders  on allocation of cash resources.”
A company spokesperson said ” We intend to redeem the outstanding October FCCBs at the end of the proposed four month extension, subject to requisite approvals. We are actively working on various sources of funding; including from the sale of non-critical assets, fresh debt, equity-linked and/or equity fund raising through the domestic and international capital markets, and additional secured leverage at an international subsidiaries-level by optimally re-balancing our debt across various assets ”.

The company has sold off its Chinese subsidiary and sale of its wind farms in India  raising about Rs 540 crore in the last few months.

In July, the Pune-based firm had redeemed bonds valuing $360 million after raising cash through sale of non critical assets, debt and internal accruals. Suzlon’s business has been hurt by a slowdown in the wind energy business and reported a loss of Rs 696 crore in first quarter FY 2013. The company’s revenue grew ten%  but losses widened both at an operating and net  level due to high interest cost and fall in margins. The company is expecting 0.5% improvement in margins for the full year.

Recently Suzlon told investors that the near term business outlook is challenging because of weak macro environment and uncertain regulatory framework in the US and Europe. The company said it continues to focus on Germany, Canada, UK, Brazil, South Africa and the domestic market. On Thursday Suzlon announced that its overseas subsidiary RePower Systems bagged an order for eight 3.2MW wind turbines to an Austrian firm.

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