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| Suzlon renegotiates financial commitments |
| BS Reporter / Mumbai May 29, 2009, 00:01 IST |
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Fund-starved Suzlon Energy, the world’s fifth-largest wind turbine maker, today said it had successfully renegotiated financial covenants and amended key terms of the bank loan facilities it had taken for acquiring its German subsidiary, REpower Systems AG, and Belgian subsidiary Hansen Transmission.
Banking covenants are agreements between a company and its creditors which stipulate the levels of interest cover, working capital and debt service cover, so as to maintain the balance between debt and equity capital, said sources.
As a result of the renegotiations, the company has given more relaxed financial commitments for the balance tenure of the loan on gearing, debt service coverage ratio and net debt to Earnings Before Interest, Depreciation ,Tax and Amortisation (EBITDA) ratios. The banks have also included Hansen Transmissions International and its subsidiaries for computation of the covenants. And allowed higher thresholds on additional indebtedness for Suzlon and its subsidiaries and amended other key terms of loans, Suzlon informed the stock exchanges.
“As on March 31, the total outstanding against the said facility was ¤504 million (Rs 3,320 crore) funded facility and a ¤205 million (Rs 1,357 crore) guarantee facility,” the filing added.
In February 2007, Suzlon had raised an over Rs 10,400 crore, or ¤1,575 million, debt facility from a consortium of 24 international banks in order to fund the acquisition of REpower and the Belgian subsidiary, Hansen Transmissions International NV. Suzlon acquired the German wind turbine manufacturer for ¤1.35 billion, or about Rs 7,314 crore, in May 2007 and bought Belgian gear box manufacturer Hansen in March 2006 for about $565 million, or over Rs 2,600 crore.
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