After debt restructure, Suzlon looks to raise ₹950 crore from selling assets

After the restructure of ₹12,153 crore of debt, which will slash Suzlon’s interest burden by 70 per cent in the current year, the wind turbine manufacturer has now trained its sights on reducing fixed costs. Suzlon is now looking to raise ₹950 crore by selling off some assets in the next few years.

Suzlon’s Chief Financial Officer, Swapnil Jain, told BusinessLine that the company had identified “office spaces and manufacturing facilities which have not been utilised fully for further de-leveraging”. He said the company had not yet monetised any manufacturing facility and a decision on this would be taken in due course.

While Jain did not say which assets Suzlon would sell, he observed that the company had built itself up for a much higher level of activity, but the industry itself has remained listless in the last three years. Suzlon today has capacity to produce 6,000 MW worth of turbines, from 14 manufacturing facilities, not to speak of 8 R&D centres; comparatively, its orders on hand are for 846 MW.

Also read: Suzlon Group gets lenders' nod for the debt restructuring plan

As for office spaces, one good candidate for monetisation is Suzlon One Earth, a sprawling 4.35 lakh sq ft campus in Pune, which is a ‘platinum’ rated green building fully powered by wind and solar, a source close to the company, said.

Positive outlook

In 2019-20, Suzlon made a net loss of ₹2,692 crore compared with net loss of ₹1,276 crore in the previous year, as net revenues fell to ₹2,933 crore from ₹4,978 crore in the year before.

Jain, while not wishing to affirm that the company would turn in a profit this year, said the current year would be much better, because of the debt restructure as well as several other steps.

First, interest costs are expected to fall to around ₹370 crore from ₹1,340 crore in 2019-20. The weighted average cost of interest is now 2.67 per cent.

Second, the company expects savings in overhead costs arising out of its paring of international operations. Consequently, international business development set up has been downsized; R&D centres abroad have been moved to India, saving costs.

With these, the company managed to bring down fixed costs by about 40 per cent, he said.

In its presentation, the company has said that the promoters brought in ₹362 crore of capital recently, as a result of which the equity based has increased to 771 crore shares.

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