Suzlon gets FIPB nod for issue of overseas depositary receipts
04 Feb 2009
Wind power major Suzlon Energy Ltd, which recently suspended plans to raise Rs1,800 crore throuh a rights issue, has received FIPB approval to raise up to $379 million (Rs1,800 crore) through depositary share offer overseas, a company spokesman said.
Suzlon, the world's fifth-largest wind turbine maker, is now planning to raise money through an Global/American Depository Receipt issue and/or a preferential allotment.
The issue is expected to raise the foreign equity holding in Suzlon from 20.76 per cent to 25.25 per cent. The earlier proposal was approved by CCEA on 12 December 2008.
The company was yet to decide on whether to go for American or Global depositary receipts, the company spokesman said, adding that things are still in the preliminary stages.
Suzlon has been evaluating funding options to raise its controlling stake in German subsidiary REpower, after it agreed in January to a revised payment schedule to buy a 22.4 per cent from Portugal's Martifer.
The wind turbine manufacturer recently increased its stake in REpower to 91 per cent by acquiring the 22 per cent Martifer stake. Suzlon has to pay it in three tranches, one of which was already paid in December 2008. The remaining two are due in April 2009 and May 2009, respectively.
''We are looking at all options of raising money, keeping it open,'' Suzlon chief operating officer Sumant Sinha said. Sinha said the company was looking for long-term options and might also take fresh equity after repayment of current debt (not exceeding debt-equity ratio of 1:1).
Earlier, the company had sold 10 per cent of its stake in Belgium-based wind turbine gearbox maker Hansen to a London investment firm Ecofin. The sale is expected to have fetched Suzlon $12-14 million.
Suzlon will have total cash outflow of Rs2,100 crore by the end of 2009-10 and inflow on account of internal accruals of Rs2,450 crore, according to analysts.
Suzlon's order book, at present, is at 1,916 MW (98 MW of domestic, 1,818 MW of international), of which, around 800 MW is expected to be executed in Q4 of 2008-09. Suzlon is in negotiations for another 2,000 MW of orders spread across US, Europe, China and Australia. Of this 1,000 MW is expected to be closed in the next six months, according to an Edelweiss report.
