Troubled wind turbine maker, Suzlon Group, on Wednesday announced the sale of a block of wind assets for about R200 crore to repay its debt. These windfarms are located across India, with a majority of them located in Tamil Nadu.
Suzlon?s foreign currency convertible bonds comes up for redemption in June 2012 and October 2012 and this aggregates R3,021 crore. Suzlon has been maintaining that they would be able to take care of these obligations through recoveries from customers, sale of non-core assets and from selling their stake in Hansen Transmission.
The company has to raise R1,500 crore by June 2012. Kirti Vagadia, the recently appointed CFO of Suzlon Group who took over from Robin Banerjee, said ?this is a modest, but important, step forward in our strategy to optimise our capital structure and meet our repayment obligations in this year?.
However, the market has reacted negatively to the wind asset sale and the stock was down 1.5% on the BSE to R25.15 on Wednesday.
The company was hopeful of recovering money from one of its US customer, Edison Mission, which would have eased the burden. HSBC Global Research has said in its recent report that it did not expect Suzlon to receive its due payments of $211 million from its US corporate client Edison Mission. So Suzlon will have to depend on asset sales to meet these obligations. The latest sale of windfarms is scheduled to conclude by the middle of May after completion of due diligence and requisite approvals, the company said.
?In addition to divesting these non-core assets, we believe our consistently improving business performance and outlook, particularly our strong revenue visibility for FY13, puts us in strong position as we begin the new fiscal,? Vagadia said.