Indian wind group Suzlon insisted it has until January 2020 before its lenders take “extreme steps”, as reports suggested its creditors are poised to start debt recovery proceedings
Suzlon – which has described its own debts of around $1.5bn as unsustainable – responded to reports that its creditors have decided that restructuring efforts underway won’t prove to be a long-term solution, and are planning to start procedures via official bodies.
In a statement to the Mumbai Stock Exchange Suzlon repeated earlier assurances that the lenders have “already signed inter-creditor agreement and have time till January 2020 to work on a sustainable resolution plan before taking any extreme steps”.
The company said it is “continuously working” on a resolution plan to divide its debt into “sustainable and unsustainable” segments and asked investors not to “give heed” to reports in the media over its situation.
Suzlon’s own auditor last week said the company was under “severe liquidity stress” that may cast significant doubt on its ability to continue as a going concern, with two potential investors, widely believed but never confirmed to have been Vestas and Brookfield, having withdrawn earlier offers to be part of restructuring plans.
That came as Suzlon’s commercial position continued to show the strain of its financial woes, with a second-quarter loss of 7.8bn ($108m) rupees for the three months ending September, widening from a year earlier 6.27bn rupees, as CEO JP Chalasani admitted Suzlon’s “operations are at a subdued level with minimal allocation of funding as we are trying to fix our capital structure”.
But the company insists there is still all to play for for Suzlon in the Indian wind market, which is struggling to emerge from a tough few years caused by policy challenges and factors such as land availability and grid access, pointing to the company's big service fleet and a 1.5GW order book.