Suzlon’s debt recast: Tilting at the turbines?
Suzlon Energy takes its name from the Gujarati word “sooj-booj”, which means clever thinking, and loans from banks , or ‘lon’. Both these ingredients, says its founder Tulsi Tanti, form the cornerstone of any successful business. But it is the latter part of the name that Suzlon has come to be known for in recent times. Even a slew of good news from the maker of wind turbines — a number of big-ticket domestic and international orders — has not been able to mask the infamy from an underlying Rs 13,000-crore loan on its balance sheet.
The company, whose business has suffered in recent times owing to the global economic slowdown, removal of certain tax breaks for wind power producers in India and onslaught of cheap products from China, recently got a breather. In October, it was referred for corporate debt restructuring (CDR) after it defaulted on payments of foreign currency convertible bonds (FCCBs) worth $221 million. The lenders restructured its loans to the tune of Rs 9,500 crore, giving it a two-year holiday from interest payment, and enhanced working capital facilities. But will these steps be enough to add new wind to its sail?