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Suzlon to sell Indian wind assets worth USD 40m

World’s fifth largest wind turbine supplier to accrue USD 40m for selling on wind farm assets

Suzlon will raise USD 40m from wind farm assets as part of repayment obligations

Suzlon Energy will raise around USD 40m for selling a block of wind farm assets, it was announced on Wednesday.

The wind farms are located across India, with majority of the assets in Tamil Nadu. The transaction is scheduled to be completed by mid-May after due diligence and requisite approvals are completed.

"This is a modest but important step forward in our strategy to optimise our capital structure and meet our repayment obligations this year," CFO Kirti Vagadia said.

Suzlon's FCCB (foreign currency convertible bonds) deadline is fast approaching and it may face USD 389m in bond redemptions if investors holding the FCCBs choose not to swap them for shares.

Suzlon shares have been under pressure in the last few months over concerns on its ability to repay debt this year. The stock, which currently trades around Rs 25, and hit a 52-week low of Rs 17.20 in January, is at 65-70 per cent discount to the conversion price of FCCBs.

HSBC last month said it expects Suzlon to fall short by Rs 750 crore in June, when its first tranche of FCCB payments is due. The company is expected to face a shortfall of Rs 3,000 crore in meeting its entire repayment obligations, it said.

Suzlon's Vagadia, however, is more upbeat, banking on a strong order pipeline.

Suzlon said its order-book was highest ever at USD 7.5bn as of February, with strong execution pipeline for fiscal 2013.

"In addition to divesting non-core assets, we believe our consistently improving business performance and outlook, particularly our strong revenue visibility for FY13, puts us in a strong position as we begin the new fiscal," Vagadia said.

Suzlon spooked the market last week when it announced the resignation of its then CFO Robin Banerjee. Vagadia, while being in the hot seat as the new CFO of Suzlon Energy, will retain his earlier position of group finance head. The company said Robin Banerjee is leaving to take position outside the group.

Suzlon shares were down 1.8 per cent at Rs 25.15 on NSE in noon trade on Wednesday.