Business Daily from THE HINDU group of publications
Friday, Nov 06, 2009
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Friday, Nov 06, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Markets
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Stocks Corporate - Mergers & Acquisitions
BL Research Bureau The acquisition of shares pledged by Suzlon Energy’s promoters by Indiabulls Financial Services and IDBI Trusteeship Services (acting on behalf of certain lenders), indicates that the company’s cash woes continue. The promoter group of Suzlon had earlier pledged about 21.8 per cent of the total share capital to lend to the company. With the current acquisition of the pledged shares, Indiabulls and IDBI Trusteeship would up their stake in the company to 6.38 per cent and 5.01 per cent respectively, with the promoter group’s holding declining to about 50 per cent. As of September, the company’s promoters had infused as much as Rs 1,175 crore as loan, by pledging their shares. Suzlon’s Rs 12,525 crore net debt, now close to 1.5 times its net worth, ballooned as a result of loans to acquire two overseas wind equipment makers — Hansen Transmissions and REpower Systems. Refinancing optionsPoor volumes in the US market led to a decline in revenues and losses in the September quarter for Suzlon. The company has been contemplating a partial or full stake sale in its overseas subsidiary Hansen Transmissions or refinancing of existing debt, in order avoid a debt trap. Recent reports state that Suzlon is looking at the option of refinancing its dollar loans, which would be repayable after six-seven years. While this may reduce pressure to service debt in the near term, a revival in order flow and execution of projects could be the key to meet the company’s working capital requirements and revoke the remaining pledged shares. More Stories on : Stocks | Mergers & Acquisitions | Suzlon Energy Ltd
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