Money Apr 4, 2012
Just two months before Suzlon Energy's repayment period for its first tranche of first foreign currency convertible bonds worth Rs 1,500 crore comes due, the wind turbine maker today said it plans to sell a bulk of its wind energy assets for Rs 200 crore.
Reacting tot he news, the stock dipped 2 percent at Rs 25.20 on the BSE.
In a press release to BSE,Suzlon Group, said it has sold a block of its wind farms, most of which are located in Tamil Nadu for $40 million. The deal is expected to be completed by Mid-May, after the due diligence and required approvals.
Suzlon's foreign currency bonds (FCCB), which is the money being raised by the issuing company in the form of a foreign currency, are due for repayment in June and this caused significant concern amongst investors as the company's financial performance is not up to the mark. It has to pay almost $559 million in the next seven months.
The wind energy company has been facing a severe cash crunch brought on by a slump in the market and delayed payments from some big customers. As a Firstpost story noted earlier, HSBC Global Research does not expect Suzlon to receive its due payments of $211 million from its US corporate client Edison Mission.
According to the report, Suzlon is likely to fall short by Rs 750 crore in June, when its first trance of FCCB payments is due. The company is expected to face a shortfall of Rs 3,000 crore in meeting its entire repayment obligations, the brokerage added.
Its CFO, Robin Banerjee, even quit the company last week. Suzlon's losses had increased to Rs 301 crore in the December quarter against a loss of Rs 253 crore inthe year-ago period.
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