Debt laden Suzlon Energy, the world’s fifth and India’s largest wind turbine maker by cumulative installed capacity, is striving hard to reduce debt.
According to analysts tracking Suzlon, the company has a total of repayment obligation of $750 million this year including $569 million in foreign currency convertible bonds.
On Saturday, the company said it is selling its Chinese manufacturing subsidiary to China Power (Tianjin) New Energy Development Company (CPNE) for $60 million (Rs 340 crore) to pay off its debts.
"The two companies have signed a binding term-sheet for sale of the subsidiary, Suzlon Energy Tianjin to CPNE, with the majority of its assets and liabilities for $60 million or Rs 340 crore,” the company said in a statement here. The sale is subject to requisite regulatory approvals, it said.
"This is also in line with our previously announced strategy to dispose of non-critical group assets to reduce our long-term debt,” Suzlon Chairman Tulsi Tanti said in the statement.
"The dynamics of the wind energy market have changed considerably over the past year, and we are realigning our strategy to the China market with an agile, asset-light business model to achieve the high growth and margins but with lower investments,” he said.
The Pune-based company on June 11 had obtained 45 days extension for repayment of foreign currency convertible bonds (FCCB) due in June ($359 million) until July 27, 2012.
"The company has to repay foreign currency convertible bonds in June ($359 million) and October ($210 million), totaling $569 million,” a company spokesperson told Financial Chronicle earlier. He had said the company would also raise additional funds required for payments from its internal accruals and from the sale of non-core assets.
Suzlon Energy said it will continue its strong presence in China and complete all existing customer contract obligations. “We strongly believe that China will maintain its position as the world’s largest wind power market, and we continue to remain fully committed to our customers there. Looking ahead, we will approach this market by combining development with an innovative partnership model,” Tanti said.
The company entered China with marketing operations in 2005 and set up its wholly owned manufacturing facility in 2006. It has till date installed over 900 mw wind capacity in that country.
