Wind energy major Suzlon plans to raise up to Rs 5,000 crore from the secondary market and increase its borrowing limit to Rs 10,000 crore from the current Rs 7,000 crore.
A Suzlon notification to the stock exchanges today said its board had approved proposals for shareholders’ nod to increase its authorised share capital from Rs 445 crore to Rs 700 crore and to issue securities (like ADRs, GDRs, FCCBs, non-convertible debentures, convertible bonds, QIP, etc) of up to Rs 5,000 crore. The board also approved the increase of borrowing limits, other than temporary loans and working capital facilities, from Rs 7,000 crore to Rs 10,000 crore.
A company spokesperson said, though the board had approved a resolution for preferential allotment, there was no immediate plan to raise funds from the secondary market. Suzlon will soon seek a postal ballot of shareholders to get the approval.
The board also approved the sale of 31.99 million shares of Suzlon Energy to IDFC Private Equity Fund in a no-cash transaction. IDFC Private Equity will get preference shares in Suzlon, in return for the stock it holds in Suzlon subsidiary SE Forge. Two years ago, IDFC Private Equity had picked up a 17.1 per cent stake in SE Forge for Rs 400 crore. IDFC PE will get around a 1.8 per cent stake in Suzlon Energy valued about Rs 184 crore.
At around the same time, Suzlon had suspended its large-scale capital expansion plans due to sluggish conditions in the wind energy market and the global economic slowdown. Faced with liquidity problems, Suzlon also had to refinance its loans of close to Rs 10,000 crore with its creditors.
It also sold a 35 per cent stake in subsidiary Hansen Transmission for around $370 million in November last year to reduce its debts.
