Surprise! Suzlon Energy a star performer too?

Suzlon Energy jumped by almost 12 percent on the exchange after its unit, REpower System, signed an agreement with a consortium of banks headed by BayernLB, Commerzbank Aktiengesell chaft and Deutsche Bank for a syndicated loan of 750 million. According to the press release, the loan has a term of 2.5 years and saw 13 German and international banks and credit insurance companies participating in the loan.

[caption id=“attachment_230839” align=“alignleft” width=“380” caption=“Suzlon Energy has been facing a cash crisis as its Foreign Currency Convertible Bonds (FCCB) repayment approaches its due date. Reuters”]  [/caption]

This move enables REpower to secure follow on financing early for the credit facilities of 600 million agreed in May 2009, the release added.

REpower’s CFO Derrick Noe said “The confidence that our banks and credit insurance companies are showing in our strategy is an important sign for all our stakeholders, especially given the current difficult environment in our industry. Increasing our credit lines by 25 percent has put us in a good position to continue the profitable growth course seen in past years. Actually, we are growing faster than our competitors and are gaining significant market shares. We expect a double-digit growth for both, sales and earnings, for the current as well as for the next year”.

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Suzlon Energy has been facing a cash crisis as its Foreign Currency Convertible Bonds (FCCB) repayment approaches its due date. Early in February, the company had slashed its sales guidance for the year ended March 2012 to Rs 21,000-22,000 crore from its earlier figure of Rs 24,000- 26,000 crore after it reported a sharp fall in revenues in the December quarter. It also reported a sharp loss of Rs301 crore in the quarter. In fact, its auditors, SR Batliboi had raised doubts about the company’s ability to repay its foreign currency convertible bonds due for redemption in June 2012 and October 2012 (aggregate redemption value of the FCCB is $569 million or Rs3,021 crore).