Suzlon Energy up 15% on plans to raise Rs 10,000 cr via listing arm on LSE

MUMBAI: Shares of debt-ridden Suzlon Energy surged nearly 15 per cent in trades so far following reports that the company is planning to raise nearly Rs 10,000 crore by listing its German arm on the London Stock Exchange (LSE).

The company is planning to sell shares in its German subsidiary Senvion SE (erstwhile RE Power) to raise Rs 10,000-crore by listing it on the LSE, reported TOI.

According to the report, the company will have to dilute 25 per cent stake in Senvion to meet the UK listing norms and expects a Rs 40,000-crore valuation for its crown jewel. The share sale is likely to be the biggest offering in rupee terms by an Indian firm in the global market in recent years.

Suzlon Energy, which has a debt of Rs 13,000 crore on its books, has been making losses for the last three years due to global economic slow-down. It has also been unable to pay its bondholders due to the slowdown in the global markets.

Suzlon, with an order book of $7 billion and global installed capacity of 24,000MW, a fourth of which is in India, has dropped two positions to become world's seventh largest wind turbine manufacturer due to contraction of traditionally strong, home and the US markets, according to Navigant Research in its annual BTM World Market Update report.

In February, auditors of Suzlon Energy had raised issues like the wind turbine maker’s ability to generate adequate cash flow to support operations. The concerns were mainly related to the company defaulting payments to Foreign Currency Convertible Bond (FCCB) holders as well as overdue amounts to certain creditors and lenders.

The company had posted a consolidated net loss of Rs 1,075.25 crore in the quarter ended December 2013.

The listing of Senvion SE will help the company with funds but it need to be seen whether it can bring cash to Indian shores.

At 10:50 a.m, the stock was at Rs 10.99, up 11.12 per cent, on the BSE. It touched a high of Rs 11.35 and a low of Rs 10.35 in trade today. Around 28.4 lakh shares were traded in the counter against two-week average of 9.35 lakh shares.