Suzlon has completed the first phase of its bigger debt recast programme by paying back the outstanding loans worth $780 million for its overseas acquisition. It has used part of the proceeds from sale of stake in Hansen last month ($370 million) and has taken a fresh US dollar denominated refinance loan of $465 million from SBI.
Through this, it has also reduced net overall debt by $350 million or 15% of total. Rothschild is the financial advisor for the debt refinancing plan while SBI Caps was the sole advisor for the US dollar loan.
The new five-year, dollar-denominated loan has a two-year moratorium on principal repayment and two-year holiday on debt covenants.
Suzlon Energy, the third largest wind turbine maker, had sold 35.2% stake in subsidiary Hansen Transmissions for $370 million last month to raise cash for debt repayment. It continues to hold 26.06% of the company and is likely to sell the remaining stake in the near future even as it has said it won’t happen before June’10. The company promoters, Tulsi Tanti and his family, have also cut their stake in Suzlon to raise funds.
With the last stake sale, Suzlon encashed around $470 million from Hansen, its three-and-half-year-old transaction. Earlier this year, Suzlon sold a 10% stake in Hansen to London-based investment firm Ecofin Ltd. Post that deal, Suzlon’s stake in Hansen fell to 61.28%. In 2006, Suzlon had acquired Belgium-based Hansen, a leading wind turbine gearbox manufacturer, for $645 million in an all-cash deal.
Suzlon has been reeling under the pressure of debt and posted a net loss of Rs 356 crore for the quarter ending September ’09. The company’s net debt stood at Rs 12,525 crore at the end of this quarter.