Suzlon feels financial woes over with REC-led refinance; looks to raise Rs 1,200 cr in FY23 from rights issue
Suzlon Group feels the monetary difficulties that troubled the wind turbine maker are behind it, with the over Rs 3,000-crore debt refinance led by REC. The Pune-based firm, which as soon as struggled to pay its over Rs 6,500 crore debt, feels its order ebook, pipeline of potential enterprise and authorities insurance policies are different tailwinds that can provide assist, a senior official has stated.
It’s trying to increase as much as Rs 1,200 crore by way of a rights subject of shares by the fiscal-end to pare the refinanced debt of Rs 3,000 crore, its Chief Monetary Officer Himanshu Mody stated.
He stated the current developments on debt facet, which noticed (REC) and Ireda taking on Rs 3,000 crore of debt by way of a refinance and an SBI-led 16-bank consortium settling for a 5 per cent fairness within the firm for the remaining Rs 3,500-crore publicity, will assist strengthen its steadiness sheet.
“The monetary woes are behind us. We’ve got a wholesome steadiness sheet, good order ebook and a robust pipeline,” Mody stated.
He stated having two lenders who’ve higher understanding of the sector it operates in will assist it cut back the bureaucratic challenges posed whereas being in a consortium of lenders and benefit from enterprise development alternatives well timed.
Proper now, the debt to working revenue ratio stands at 3:1, and the identical could go up because it borrows extra for working capital wants, however total, the trajectory on the debt profile is in direction of enchancment, he famous.
Mody stated scheduled debt repayments will get the debt ranges right down to Rs 2,500 crore however the firm desires to trim it additional.
With this in thoughts, its board has accredited elevating as much as Rs 1,200 crore by way of a rights subject of shares, which Mody stated will occur in FY23, and likewise monetisation of non-core belongings.
Mody declined to supply any additional particulars on the non-core belongings which it plans to promote, however exuded confidence that it is going to be in a position to realise sizeable quantity by way of the divestment.
The debt owed to REC and Ireda is long run in nature, however the tenor is considerably lesser than the sooner 20 years for the time period loans from the banks’ consortium, he stated.
The corporate doesn’t have any main funding plans past operational capital expenditure (capex) which may be funded by way of working capital strains, and can be specializing in bettering its capability utilisation, he added.
It has an order ebook to ship as much as 700 MW of capability, Mody stated, pegging the pipeline of offers it’s chasing at an analogous degree.
Authorities insurance policies, together with final month’s announcement of taking a relook on the e-reverse public sale of wind power tasks with a view to eradicating it, are positives that are serving to the wind power sector, he stated.
The corporate doesn’t have any main contribution from exports in its Rs 1,378 crore income (in Q1 FY23), and can be now in a position to chase offers exterior India in addition to the situations imposed by the bankers’ consortium have additionally ended, he stated.
Additionally it is enterprise a year-long train to scale back the variety of subsidiaries to 24 from the current 44 entities to extend transparency, Mody stated.
A one-time achieve helped the corporate submit an enormous revenue of Rs 2,433 crore within the June quarter.
Mody stated the working revenue of Rs 214 crore may be sustained going ahead as nicely, given the visibility that it has. He additionally stated two credit standing businesses have upgraded its debt to funding grade after the debt refinance scheme was carried out.