(Corrects period in the first paragraph.)
Feb. 14 (Bloomberg) — Suzlon Energy Ltd., India’s largest
wind-turbine maker, said its loss widened in the fiscal third
quarter as a shortage of cash hampered its ability to complete
sales as the company negotiates with bondholders to pay its
debt.
Pune-based Suzlon reported a loss of 11.56 billion rupees
($215 million) for the final three months of last year compared
with an 810 million-rupee shortfall a year earlier. Four
analysts surveyed by Bloomberg estimated a 6 billion-rupee loss.
“Abnormal operating environment hurt business,” Chief
Financial Officer Kirti Vagadia said in a telephone interview.
Suzlon focused on “liability management” during the quarter,
leading to “liquidity constraints” that kept the company from
executing orders, Vagadia said.
Last month, Suzlon finished refinancing $1.8 billion in
debt following its default on $209 million of foreign-currency
convertible notes on Oct. 11. The company’s failure to make
payments on time was India’s biggest convertible bond payment
failure and fanned concerns that creditors may demand immediate
payment of other loans.
Loan and refinancing costs rose to 1.9 billion rupees from
764 million rupees in December. The turbine-maker’s program to
revamp 95 billion rupee of debt allows a two-year moratorium on
repayments, which will help the company focus on meeting its
order backlog, Vagadia said.
Suzlon has orders worth 415.5 billion rupees, according to
an e-mailed statement detailing the earnings. It has cut its
interest rates by 3 percent and plans to use the funds to expand
while cutting operating costs 20 percent by June.
‘Received Comfort’
“Suzlon has received comfort from lenders after
restructuring of its debt, which should allow the company to
recoup its resources and work on execution of orders,” said
Shantanu Jaiswal, an analyst at Bloomberg New Energy Finance in
New Delhi. “Suzlon continues to get orders from independent
power producers and corporates. It has a good track record for
execution. This should help the company rebuild finances.”
Vagadia said Suzlon is working on selling “non-critical”
assets including China unit Suzlon Energy (Tianjin) Ltd., which
it expects will raise $60 million. It also plans to sell
component-making units across the world over the next two years,
he said. Suzlon shares have dropped 14 percent the past year.
The company has appointed two to three advisers to help it
sell assets though Vagadia didn’t name them. Bondholders have
rejected Suzlon’s request for a four-month extension of
payments. Vagadia said talks are continuing with investors.
“We’ve had no negative reactions from lenders so far,”
Vagadia said. Suzlon is in “progressive and constructive”
dialog with bondholders, he said.
To contact the reporter on this story:
Archana Chaudhary in New Delhi at
achaudhary2@bloomberg.net
To contact the editor responsible for this story:
Sam Nagarajan at
samnagarajan@bloomberg.net
