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Suzlon Energy slumps into Rs 807 cr loss in July-Sep

Last Updated: Friday, November 9, 2012 - 23:35

New Delhi: Debt-laden Suzlon Energy Friday posted a consolidated net loss of Rs 807.74 crore for the quarter ended September, as adverse market conditions and capital allocation issues pushed the wind turbine maker into the red.

The company, which has approached lenders for restructuring the debt, had a consolidated net profit of Rs 48 crore in the second quarter of last fiscal.

The figures are after taxes, minority interest and share of profit/loss of associates.

However, Suzlon's consolidated total income rose to Rs 5,784.39 crore in the September quarter, from Rs 5,154.45 crore in the year-ago period.

Suzlon Group Chief Financial Officer Kirti Vagadia said that capital allocation issues and adverse market conditions, among others, impacted the second-quarter results.

Regarding the Corporate Debt Restructuring (CDR) proposal, he said a meeting with lenders was held yesterday.

"None of the lenders opposed (our CDR) proposal," Vagadia said.

However, specific details were not disclosed.

Suzlon Chairman Tulsi Tanti said the group's performance was "disappointing" in the first six months of current fiscal.

"Our performance was affected by macro-economic headwinds and policy uncertainties in some key markets; as well as by our internal challenges around liability management, and sub-optimal capital allocation to business operations," he noted.

The wind turbine maker has an order book of about Rs 37,290 crore (nearly USD 7 billion).

"We have also started the process to comprehensively address our liabilities, inter alia, through the CDR mechanism and balance our long-term capital structure," he said.

On a standalone basis, Suzlon reported a net loss of Rs 546.33 crore for the quarter ended September. In the year-ago period, the net loss was Rs 19.39 crore.

Standalone total income fell to Rs 735.34 crore in the latest September quarter from Rs 2,029.41 crore in the same period a year ago.

On October 29, Suzlon said it has initiated discussions with lenders for restructuring debt, including a two-year moratorium on repayment of term loans.

Suzlon has a debt burden of over Rs 13,000 crore including Foreign Currency Convertible Bonds (FCCBs) obligations. A few weeks back, bondholders had rejected its proposal seeking four-month extension to repay overseas debt worth about USD 221 million.

The wind turbine major has sought a a two-year moratorium on principal and interest payments on term-debt.

SBI, which has an exposure of about Rs 3,500 crore to Suzlon, on Wednesday said the wind turbine maker's move to approach corporate debt restructuring cell would give more time for lenders to sort out the issues.

"I think reference to the Corporate Debt Restructuring (CDR) cell gives the bankers more time to iron out these issues and Suzlon's financials are a little more complex," SBI Chairman Pratip Chaudhuri had said.

The bank had suggested merger of the wind turbine maker's German arm REpower with the group to improve profitability.

"... We recognise that despite strong business fundamentals and a USD 7.2 billion order book, liquidity constraints over the first half of the fiscal, a volatile market environment, and the timeline of the CDR process will continue to impact performance," Suzlon had said last month.


First Published: Friday, November 9, 2012 - 23:35
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