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Suzlon eyes to raise $400 mn by selling 15 non-core assets

Source : PTI
Last Updated: Sun, May 05, 2013 08:57 hrs
Maintenance engineers work on top of a power generating wind turbine at Suzlon wind farm in Surajbari village

World's fifth largest wind turbine- maker Suzlon Energy is planning to raise up to USD 400 million by selling 15 of its non-core assets in a bid to partly retire the huge debt pile of nearly Rs 14,600 crore, a top company official has said.

Earlier, the company was planning to raise USD 100 million.

"We have identified 15 non-core assets, mostly in overseas markets like China, US, etc, which we plan to sell in the next 12-18 months in a phased manner. We expect to realise nearly USD 300-400 million through the sale process," chief financial officer Kirti Vagadia told PTI here.

The company has already initiated the process to sell stake in its wholly-owned Chinese subsidiary Suzlon Energy Tianjin, through which it will realise USD 60 million, or Rs 338 crore. He also said the entire proceeds from these planned sales will go into retire debt.

Suzlon is also planning to sell stake in its forging business SE Forge.

"We are also looking at selling some of our components manufacturing facilities in the country," he said, adding, "We will outsource such products to ensure cost reduction."

This is a part of Suzlon's cost cutting and debt reduction programme, Vagadia added.

The company, which got a lifeline from its lenders in January with Rs 9,500 crore debt restructuring, has embarked on a plan to reduce debt and interest by selling non-core assets and cut its fixed costs by nearly 20 per cent.

As part of this strategy, the Pune-based company has so far laid off 750 jobs in its German subsidiary REpower. The company has a total workforce of around 13,000 across 32 geographies it is operating in.

The company late March created history by becoming the first firm in entire Asia, ex-Japan to raise USD 647 million in overseas bond sale, which was guaranteed by its lead banker SBI as part of its plan to retire its USD 650 million forex loans.

However, the company is still talking to settle the USD 221 million with FCCB bondholders following the default last October.

"We have embarked on our cost cutting plan and we may lay off some more jobs in the future as well," Vagadia said, but ruled out job cuts in the domestic market.

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