July 28, 2012 -
PRLog -- Suzlon energy, India’s largest wind turbine manufacturer demonstrated great strength and commitment by repaying it first tranche of FCCB repayment in time. The company was very well backed by a consortium of around 11 banks including India’s premier bank State Bank of India, most of them nationalized. As public sector banks are typically more pragmatic and conservative, this shows their confidence about fundamental strength of the company’s business model and management team. The company has been plagued by huge debt issues and this repayment comes as a relief also reducing the overall debt burden by around INR 200 Crores. Sources claim that the current lending has been acquired at a very low interest cost and the lowest interest cost within the Suzlon debt portfolio. The second tranche of FCCB payment will only come up in October, and is much smaller being almost one third of current repayment. We believe that Suzlon can handle that with ease as there is enough time to handle that. Also with the current payment on time the confidence in the remainder debt payment is very high.
The market can now expect the company’s share price which had crashed to under INR18 to rise to over INR 30 in the short term.
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