Suzlon gets a new repayment schedule

17 December 2008

Wind power equipment maker Suzlon Energy has negotiated a revised payment schedule with the Martifer Group of Portugal to acquire its 22.4-per cent stake in REpower Systems AG, Germany.

As per the new terms, Suzlon will pay Martifer approximately €65 million in December 2008, €30 million in April 2009 and final tranche of €175 million in May 2009.

Upon completion of this transaction, Suzlon will reach ownership level of approximately 91 per cent in REpower and Martifer will no longer hold a stake in REpower.

Until that date, Martifer will benefit of the bank guarantee covering Suzlon's obligations, while the revised payment schedule will give the Indian company a much-needed breather.

Suzlon, already holds 66 per cent of turbine maker Repower and has been trying unsuccessfully to raise funds to acquire the rest of the stake.

Unconfirmed reports said Suzlon could default on its loan obligations, which had driven the share price of the company down to Rs36.