Settling dues

Mumbai, Dec. 18: Suzlon Energy has repaid a $780-million (Rs 3,700 crore) loan it took to fund the acquisition of Hansen Transmissions International NV (Hansen) in 2006.

A portion of the loan payback came out of the proceeds from the sale of Suzlon’s stake in Hansen last month.

The wind turbine maker sold a 35.22 per cent stake in the Belgian firm for $370 million. Suzlon now holds a little over 26 per cent in Hansen through its wholly owned subsidiary. Suzlon said it also took a new five year dollar-denominated loan of $465 million (Rs 2,350 crore) from the State Bank of India.

In a communication to the stock exchanges, Suzlon said the five-year loan from the SBI provides for a two-year moratorium on repayments of principal as well as a two-year holiday on debt covenants. The repayment of acquisition loans is part of Suzlon’s debt consolidation and refinancing exercise, which is being undertaken to trim its overall debt levels.

Suzlon said it had also made progress in consolidating and refinancing its existing rupee denominated term loans and working capital loans through new debt facilities from a syndicate of banks.

As on September 30, the total debt at Suzlon is around Rs 12,500 crore.

Suzlon had acquired the Hansen stake in 2006 for about $565 million.

It had also resorted to debt to increase its stake in Germany’s REpower Systems AG, thereby pushing up its debt levels.

The company said it was also in discussions with its foreign currency convertible bondholders to streamline terms of the instruments, including the removal of financial covenants.

“This transaction completes the first phase of our refinancing exercise. We are also happy to report that we have achieved an overall improvement in our debt profile since September 30,” said Sumant Sinha, chief operating officer of Suzlon Energy.