According to reports, Suzlon Energy has sold the 240 mw Illinois-based wind farm it acquired recently from Edison Mission Energy to EverPower Wind Holdings. Suzlon had taken over the Illinois wind farm in the US to recover $208 million that was outstanding from client Edison Mission Energy, which the latter had withheld accusing the Indian wind-turbine maker of supplying defective equipment.
Suzlon did not disclose the consideration for the sale of the wind farm. The sale may have happened at 50% discount to the original price, according to industry officials.
“Right now, liquidity is very valuable for Suzlon. We are glad that we have some liquidity because of the sale of asset and that we have ended the dispute with Edison,” Kirti Vagadia, Group Head – Finance at Suzlon, told ET.
As reported by ET on April 3, cash-strapped Suzlon has acquired the wind farm with the intention of selling it to raise funds to pare debt. “We will use part of the proceeds to repay loans and part of it to fund growth,” said Vagadia.
Shares of Suzlon Energy rose 7% to end at Rs 14.94 on the Bombay Stock Exchange after the sale. “This sale of Big Sky Wind Farm to a sound long term investor like EverPower is an important part of our disinvestment strategy to hive off non-core assets and use the net proceeds of the sale to fuel our business growth,” said Vagadia.
The Big Sky project was completed in early 2011. The projects runs 114 Suzlon turbines of 2.1 mw each to generate enough electricity every year for around 50,000 homes while also offsetting over 225,000 tons of CO2 emissions, according to a press statement.
Suzlon had supplied 114 wind turbines totalling around 240 mw to Edison for the wind farm located at Illinois at a loan of $206 million in 2009. Edison Mission Group’s arm Big Sky denied payment citing that some components were defective. In 2012, Suzlon filed a complaint in the New York City Supreme Court demanding the payment, which the company claimed was then due at $217 million, including interest.
Suzlon reported a staggering loss of almost Rs 3,000 crore for the first nine months of 2013-14, It is hopeful of better times ahead as its order book stood at 5.5 gigawatts, worth about Rs 47,393 crore in value, giving the company revenue visibility for the next two years.
In January 2013, a consortium of 19 banks led by State Bank of India inducted Suzlon into the corporate debt restructuring cell (CDR) for restructuring loans of Rs 9,500 crore. This has given the company a two-year moratorium on principal and interest payments and additional working capital limit.