Tanti says Suzlon to seal $2.8 bn refinancing Deal

The company is consolidating its several loans into a single one

Suzlon Energy, India’s biggest maker of wind-turbine generators, planned to complete $2.8 billion of refinancing by January-end, Chairman Tulsi Tanti said.

Suzlon is consolidating its short and long-term loans, working capital and other borrowings into a single loan that’s already been agreed by State Bank of India and IDBI Bank, the lead banks in the deal, the billionaire said in an interview.

Another 25 banks would join the group, he said yesterday. “The rest of the banks will be completed in another 45 days,” Tanti, 51, said in Copenhagen, where he is attending global climate-change treaty talks. “So maybe at the end of January it will be completed.”

The Ahmedabad-based company, which scrapped a rights offer last year when markets tumbled, is reworking the debt taken to acquire 91 per cent of Hamburg-based REpower Systems AG after orders slowed because of the global recession. Suzlon sold 35.2 per cent in Hansen Transmissions International NV, its Belgian gearbox making unit, on November 19 to raise about $370 million.

“As part of the restructuring, there could be a debt moratorium, maybe for two years, which will give Suzlon some breathing space,” said Bhargav Buddhadev, a Mumbai-based analyst at brokerage Noble Group, who has a “positive” rating on the stock.

“The bankruptcy concerns people had will be removed. It will act as a positive trigger for the stock.” Suzlon fell 0.7 per cent to Rs 82.55 at close today, while the benchmark index declined 0.1 per cent. The stock has gained 33 per cent in Mumbai this year, lagging behind the 77 per cent rise in the Bombay Stock Exchange’s Sensitive Index.

State Bank of India CFO SS Ranjan and IDBI Bank Ltd Chairman Yogesh Agarwal couldn’t be reached for comment by telephone at their offices.

Climate talks
Global wind-power equipment makers such as Suzlon and Denmark-based Vestas Wind Systems, the world’s biggest, may get more orders if leaders from 192 nations agree to a new climate treaty at Copenhagen in two weeks of talks running through December 18.

“With a strong support of the Copenhagen meeting and a clear road-map from political leaders across the world, I think I can deliver a business of $50 billion in size by 2020,” Tanti said.

Suzlon and its units reported sales of Rs 26,080 crore ($5.6 billion) in the year ended March 31.

Global growth
The global wind-power industry could grow by as much as 35 per cent a year if an accord is reached at the Danish capital to cut emissions of developed countries and possible funding for poor nations to slow the growth of their output of gases blamed for global warming, Tanti said. Without a deal, the industry may grow between 20 per cent and 25 per cent from now until 2020, Tanti said.

The Global Wind Energy Council estimates annual growth of 22 per cent between now and 2013, compared with 28 per cent a year over the last decade, according to the group’s website.