Suzlon Energy Ltd has decided to raise as much as Rs 50 billion ($1.1 billion) selling bonds and shares, Bloomberg reported.
The company is seeking to pay down debt and revive earnings to levels before the financial crisis in 2009, which depressed worldwiturbine sales and led to a supply glut that continues to weigh on the industry.
India’s biggest wind turbines maker on July 30 reported an unexpected first-quarter net income of Rs 600 million, compared with an Rs 9.1 billion loss a year after its sales rose at the fastest pace in more than 2 years.
Vestas Wind Systems, the world’s largest wind-turbine maker, saw its loss double to 85 million euros ($121 million) in the first quarter, while Sinovel Wind Group Co., the second largest, said profit growth slowed to 1%. “This quarter has been a major turnaround,” Suzlon’s chief financial officer Robin Banerjee said .
Offshore projects and emerging markets are driving demand, he added. The wind turbine maker won 580 megawatts of contracts during the period, bringing its orderbook to 4,739 megawatts, valued at about Rs293 billion. Suzlon needs to boost orders and raise cash ahead of next year, when $389 million in convertible bonds mature and repayments start on 100 billion rupees of loans.
If bondholders decide to redeem next year, Suzlon estimates it would have to pay a premium of 6.4 billion rupees, which it hasn’t provided for in its books, the company said.
The 115 million pounds ($187 million) that Suzlon expects to get from selling its remaining stake in Hansen Transmissions International NV (HSN), a Belgium-based maker of gearboxes, will be used to reduce debt and buy out minority shareholders in its German unit Repower Systems SE.
