Suzlon Group feels the financial difficulties that afflicted the wind turbine maker are behind it, with the over Rs 3,000-crore debt refinance led by REC.
The Pune-based company, which once struggled to pay its over Rs 6,500 crore debt, feels its order book, pipeline of potential business and government policies are other tailwinds that will offer support, a senior official has said.
It is looking to raise up to Rs 1,200 crore through a rights issue of shares by the fiscal-end to pare the refinanced debt of Rs 3,000 crore, its Chief Financial Officer Himanshu Mody told PTI.
He said the recent developments on debt side, which saw Rural Electrification Corporation (REC) and Ireda taking over Rs 3,000 crore of debt through a refinance and an SBI-led 16-bank consortium settling for a 5 per cent equity in the company for the remaining Rs 3,500-crore exposure, will help strengthen its balance sheet.
"The financial woes are behind us. We have a healthy balance sheet, good order book and a strong pipeline," Mody said.
He said having two lenders who have better understanding of the sector it operates in will help it reduce the bureaucratic challenges posed while being in a consortium of lenders and take advantage of business growth opportunities timely.
Right now, the debt to operating profit ratio stands at 3:1, and the same may go up as it borrows more for working capital needs, but overall, the trajectory on the debt profile is towards improvement, he noted.
Mody said scheduled debt repayments will get the debt levels down to Rs 2,500 crore but the company wants to trim it further.
With this in mind, its board has approved raising up to Rs 1,200 crore through a rights issue of shares, which Mody said will happen in FY23, and also monetisation of non-core assets.
Mody declined to provide any further details on the non-core assets which it plans to sell, but exuded confidence that it will be able to realise sizeable amount through the divestment.
The debt owed to REC and Ireda is long term in nature, but the tenor is significantly lesser than the earlier 20 years for the term loans from the banks' consortium, he said.