Suzlon to retire Rs 5,000-cr debt from Senvion proceeds

Wind turbine maker Suzlon Energy today said it has completed sale of its German arm Senvion to the US-based Venture Capital fund Centerbridge Partners, and it will retire Rs 5,000 crore of its Rs 16,500-crore debt.
It said rest of the proceeds from the one-billion euro (about Rs 7,000 crore) deal would be used for working capital requirements.
Tulsi Tanti-run Suzlon had announced on January 22 the sale of 100 per cent stake in Senvion for 1 billion euros to pare its mounting debt.
"We are in talks with our lenders and plan to pay back around Rs 5,000 crore of our debt. The remaining Rs 2,000 crore will be used as working capital funds," Suzlon group chief financial officer Kirti Vagadia told PTI over phone.

Senvion was contributing as much as 65 per cent of the total business of Pune-based Suzlon.
In 2007, Suzlon had bought a 33.9 per cent consideration in Senvion, then known as REpower Systems AG, after a bidding war with France's Areva. The deal valued Senvion at 1.2 billion euros. It bought full control of the firm in 2011.

Since then, euro has also depreciated by nearly 30 per cent against the dollar. In 2012, the company took Senvion public by a London listing.
Suzlon, which is under corporate debt restructuring, had about Rs 16,500 crore of debt at the end of 2014, out of which Rs 8,900 crore was rupee debt and the remaining was in dollar borrowings.

When asked about the order pipeline and growth prospects, Vagadia said the company is sitting on an order book 1,147-megawatt, which will be completed by next March. Most of this orders are from the domestic market, he added.
When asked about the evolving growth environment, Vagadia said the domestic market looks very promising and going forward, the focus will be on home market and high growth markets like the US, US, besides the emerging markets such as China, Brazil, South Africa, Turkey and Mexico.
Whether Suzlon will go ahead with more asset sales, he said the company is right-sized now but "will continue to look for right price for some of its domestic assets. But we will not be into a distress sale as our cash-flow has improved over the past few years."

The company, which suffered the country's biggest convertible-bond default in 2012, has restructured local loans, refinanced international debt and cut the number of people it employs to try to streamline its costs as its business has suffered from weaker-than-expected demand for turbines.
The company was forced to restructure USD 1.8 billion of debt after defaulting on a USD 209 million convertible bond redemption in October 2012.
Suzlon was on a rapid expansion until a few years ago, riding a boom in green-energy investment. But the withdrawal of government subsidies in the country as well as in other markets, in addition to the global economic slowdown, knocked the wind out of its business.