Suzlon repays $780 mn loan, lowers debt by 15%

MUMBAI: Suzlon Energy, India’s largest wind turbine maker, on Friday said it has repaid debt of $780 million (about Rs 3,654 crore as per current exchange rates) that it had taken to increase its shareholding in REPower.

Suzlon said the amount was raised partly by selling its stake in Hansen Transmissions and partly through a borrowing of $465 million (Rs 2,180 crore) from State Bank of India. Last month, Suzlon had sold 35% of its stake in Hansen for around $360 million.
The Ahmedabad-based wind turbine company that has been restructuring its debt — estimated at around Rs 12,000 crore — for the past few months and had obtained a relaxation in norms from its bond holders.

In its statement, Suzlon said Friday’s transaction has reduced its debt by 15%. “It concludes the first phase of our refinancing exercise, resulting in an overall improvement in our debt profile,” said chief operating officer (COO) Sumant Sinha.

In the restructuring of its bonds, Suzlon has streamlined the terms of foreign currency convertible bonds (FCCBs), including removal of financial covenants, in line with new debt facilities.

Suzlon’s initiatives in restructuring include equity issues, convertible bonds, raising finances from promoters and talking to banks to implement consolidation of its debt. SBI Capital is the sole financial advisor on the dollar facility, while on the rupee facility SBI Caps and IDBI Bank are the lead arrangers. Rothschild is the lead advisor to Suzlon on the debt refinancing.

The company expects an increase in businesses even as the government announced generation-based incentive of 50 paise/unit of electricity to promote wind power producers. The subsidy is likely to benefit wind power generation by the addition of another 4,000 megawatts by the end of the 11th Five Year Plan. This is estimated to cost Rs 380 crore.