Suzlon hits new lows by refusing to file for bankruptcy

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Struggling Indian wind equipment maker Suzlon has seen its shares fall to new lows as it denies “baseless” reports that it is on the verge of bankruptcy.

Shares of Suzlon fell 12% in early Monday afternoon in Mumbai despite a statement to investors from the manufacturer strongly denying allegations that it is about to enter the jurisdiction of the National Company Law Tribunal (NCLT ) Indian.

Shares of the Indian group hit new depths at 2.22 rupees – a far cry from the 28 rupees seen in 2015.

Highly indebted Suzlon has come under intense market scrutiny since it defaulted on $172 million in bond repayments in July. Pressure mounted further when separate debt restructuring plans involving investments by Canadian firm Brookfield and Danish equipment maker Vestas came to nothing – the latter failing told to spoil a $1.2 billion plan that Suzlon was negotiating with its creditors.

Suzlon said in a statement to the Mumbai Stock Exchange: “The article [alleging imminent bankruptcy] is baseless and far from the factual position.

Wind reiterated its earlier insistence that its debt resolution plans were never hinged on just one option. “The lenders and the company continue to work hard for a sustainable resolution plan to preserve the value of the company, as the relevant stakeholders are aware of Suzlon’s contribution to the Indian renewable energy sector, the strong position of Suzlon in the market as well as its order book, as well as industry potential.

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He added: “As the company implied to the stock exchanges in its rumors clarification letter dated July 17, 2019, the lenders have already signed an intercreditor agreement and as per the Reserve Bank of India’s circular dated June 7, 2019, the lenders have time until January 2020 to work on a durable resolution plan before taking extreme measures.

Suzlon recorded a net loss of 15.3 billion rupees ($220 million) for the last financial year and its total debts stood at 111 billion rupees at the end of May 2019.

Suzlon insists it is ideally placed to benefit from a booming Indian market as the country pursues its ambitious renewable energy targets. Its latest annual results show a third year of market share gains and an order book of 1.3 GW which is “one of the largest in the Indian wind industry”.

However, the group also admitted that it faces a series of challenges in the Indian market, including land acquisition, delays in wind auctions and PPA approvals, as well as network and military issues.

Suzlon’s debt was downgraded in April by Indian financial ratings CARE, which rated the company’s “strained liquidity position”. He added: “This is due to depreciated volumes resulting from the transition phase of the wind industry and the delay in asset monetization.”

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