Long way to go

Suzlon Energy, the world’s fifth-largest wind turbine manufacturer, has got a fresh lease of life after it got approval from the Corporate Debt Restructuring (CDR) cell for its ₹9,500-crore loan package and the support of investors to restructure foreign currency convertible bonds worth $547 million. The new convertible bonds will now mature in 2019. Not surprisingly, the stock has vaulted more than two-fold from ₹9 in November 2013 to ₹23 on July 17, after hitting a high of ₹37 in June. Recently, promoters Tulsi Tanti and family increased their holding by 1.28% through group entity Sugati Holdings, following the conversion of compulsory convertible debentures at ₹13.49. The conversion saw Sugati’s holding increase from 8.53% to 9.68%. Incidentally, the promoters have pledged more than 90% of their overall holding of 38.8% with lenders. Though the stock recovered from its low, the company continues to face a daunting environment: it ended FY14 with a net loss of ₹3,548 crore on the back of an 8% increase in revenue to ₹20,212 crore. But the big overhang on the company is its debt of ₹11,640 crore, resulting in an annual outgo of over ₹2,000 crore in interest costs. The company still awaits a breath of fresh air.