We are not looking for equity investor at present: Suzlon's Tulsi Tanti

The pandemic and fear of another lockdown in parts of India has made it difficult to project a profit for the current year, according to Tulsi Tanti, chairman and MD of Suzlon. He expects it to take two years before the country recovers from the economic impact of Covid-19. 

Earlier this year, Suzlon completed the second round of restructuring for a total debt of Rs 12,414 crore. The promoters and stakeholders also infused close to Rs 392 crore as equity, as part of this plan. 

He said the firm was not looking for any further equity investment. “We are not looking for a new equity investor at present. We recently injected equity ourselves, and from our stakeholders,” he said.

The company had said in July that it had completed the restructuring and term debt had reduced substantially, with an interest rate of 9 per cent repayable over 10 years. 

The balance debt of secured consortium lenders was replaced by 0.01 per cent optionally convertible debenture (OCD) of the company, and 0.0001 per cent compulsorily convertible preference shares (CCPS) of its subsidiary, redeemable or convertible in 20 years. This also raised hopes for the company to turn a profit in the current financial year. Tanti, however, said that the situation makes profit prediction tricky. “It’s difficult to predict entirely on how the environment will emerge. We are looking at it positively, but are not very clear as to how things will move,” he said. 

For FY20, Suzlon reported a net loss of Rs 2,692 crore.

At present, said Tanti, the company is operating at 50-60 per cent utilisation, with further improvement expected January onwards. 

He added: “We expect the momentum to improve January onwards. However, 100 per cent is only possible after a vaccine is in place and the psychological pressure is released.”

Part of its debt restructuring announcement, the company also said it plans to raise further funds through sale of assets. The proceeds expected from such sale is pegged at about Rs 950 crore. Tanti expects some of these assets to be sold in the next 18 months. 

“The current environment is not very conducive for sale, but there is a good interest from buyers, but to get better price maybe we will target sale in the next financial year. This includes some of the non-core assets that are not required for the company’s business plans, like land, additional manufacturing capacity etc,” he said.