- Over the past two years, India’s shift to auctions for building wind projects from an earlier fixed-tariff program has squeezed orders and pressured profit margins of turbine makers.
- Suzlon is also losing ground to foreign competitors such as Vestas Wind Systems A/S and Senvion SA.
- An offer from a potential investor is critical for wind turbine maker Suzlon Energy Ltd. to repay lenders and continue as a going concern, its auditor Deloitte Haskins & Sells LLP said in a review report Wednesday.
- The offer envisages infusion of additional equity in Suzlon and a waiver of some of the amount due to lenders and bond holders. Based on that, a one-time settlement has been proposed to lenders, the auditor said.
- “Improvement of liquidity condition is contingent upon fructification of the offer,” Deloitte said. “Such events are not within the control of the group.”
- Suzlon, which reported a first-quarter loss of ₹335 crore ($47 million) Wednesday, missed repaying $172 million on notes due in July. In addition, the company and certain subsidiaries have defaulted on repayment of loans and interest aggregating nearly ₹1,300 crore as of June 30, according to the auditor.
Over the past two years, India’s shift to auctions for building wind projects from an earlier fixed-tariff program has squeezed orders and pressured profit margins of turbine makers. The company is also losing ground to foreign competitors such as Vestas Wind Systems A/S and Senvion SA.
Last week, a $1.2 billion settlement plan, backed by Denmark’s Vestas was said to be proposed to Suzlon’s lenders - Post default, the company’s operations are at a sub-optimal level, Suzlon’s group Chief Financial Officer Kirti Vagadia said in a separate press release. The management is working toward debt resolution, fixing the capital structure and exploring various funding options, he said.
A Suzlon spokeswoman declined to comment on the auditor’s report.
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