According to reports, wind power equipment company Suzlon, which has been undergoing a massive debt restructuring exercise, expects to bounce back by December.
Over the last few months, the company has managed to accumulate orders worth $7.1 billion but is stuck due to lack of working capital. “As part of the CDR (corporate debt restructuring) package, we were supposed to get a good amount of working capital. Approvals from banks for the release of funds are in place. It is a time-consuming process and the funds are expected to reach us soon. We expect things to settle down by December,” Chintan Shah, president-strategic business development & corporate affairs, Suzlon said. “This year we are on consolidation and stabilization,” he said.
Once India’s largest wind power company, Suzlon bought German wind power firm RE Power in December 2009 for a total investment of $1.6 billion (around Rs 10,000 crore). Suzlon expected the acquisition to give it access to overseas markets and hasten growth but it pulled the company down with debts piling to Rs 13,000 crore. Suzlon opted for CDR in October 2012.As part of the restructuring, Suzlon is laying off people, selling off non-core assets and has put its wind blades manufacturing unit in Puducherry on the block. It also wants to sell off its manufacturing unit in Maharashtra and another in the US, Shah said.
The BSE-listed company, in trouble primarily because the banker for its German arm isn’t giving it access to the cash reserves which could be used to pay off the debts, has also been working on replacing the banker with an Indian bank. This would be in place soon and could help the company access resources in REpower and thus pay off debts, Shah said.
With these to measures in place, and a strong order book, the company expects to rebound.