Wind energy player Suzlon is reportedly mulling a sale of some portion of its stake in Hansen Transmissions, it’s Belgian subsidiary in which it holds just over 61 per cent.
Besides, Suzlon has managed to restructure $500 million worth of FCCBs, reducing the liability to $389 million and also to get its debt covenants relaxed for the loan taken to acquire RePower. The Street has taken note of these developments — since March 2009 the stock has risen 211 per cent to Rs 120 outperforming the Sensex by a huge margin. However, challenges remain. For one, the company’s capacity of 5,700 Mw capacity does appear somewhat high given that the order backlog at the end of December 2008 was around 2000 Mw.
No doubt a few orders have come its way since then but the company needs to win back customer credibility after instances of blades cracking at a couple of units prompted customers to withdraw orders. If it manages to sell the Hansen stake at a good price and also to raise Rs 2,000 crore through a QIP as it is reportedly planning, it would reassure investors who are concerned about the high levels of debt.