Suzlon shares plunge after founders' share sale

MUMBAI Thu Feb 28, 2013 10:52pm IST

Maintenance engineers work on top of a power generating wind turbine at Suzlon wind farm in Surajbari village, about 275 km (171 miles) west of Ahmedabad, December 14, 2009. REUTERS/Amit Dave

Maintenance engineers work on top of a power generating wind turbine at Suzlon wind farm in Surajbari village, about 275 km (171 miles) west of Ahmedabad, December 14, 2009.

Credit: Reuters/Amit Dave

Related Topics

Stocks

   

MUMBAI (Reuters) - Shares in India's Suzlon Energy (SUZL.NS) plunged as much as 45 percent to a record low on Thursday as investors worried about the wind turbine maker's debts pared their holdings after a partial stake sale by its founders.

The disposal of a 6.2 percent stake to raise 2.4 billion rupees was part of a debt restructuring process, Suzlon chief financial officer Kirti Vagadia told Reuters.

"The promoter stake sale is not for any personal purpose but ... for supporting the company. The promoters are fully committed to the company," he said.

"The business fundamental of the company is intact. We are getting very good orders."

Suzlon shares tumbled as much as 44.9 percent to 13.35 rupees before closing down 34 percent against a broader market fall of 1.8 percent.

"The overall market was weak today and the news about the promoters stake sale added fuel to the fire," said Jagannadham Thunuguntla, equity head at SMC Global Securities.

"Investors remain worried about the company's debt profile."

Suzlon's lenders last month approved a plan to restructure $1.8 billion of debt after the company defaulted on a $200 million convertible bond redemption last October.

The company had net debt of about $2.5 billion at the end of December.

Vagadia said the founders group - which includes Suzlon Chairman Tulsi Tanti and other associated individuals and firms - would put fresh money into the company.

"By selling certain shares we can get funds for the company," Vagadia said, adding he did not expect the founders to sell more stock in the near future.

After the sale, the founders' stake has fallen to 44.5 percent, according to stock exchange filings.

Suzlon, squeezed by debt payments, tight working capital and falling global demand for turbines, has lost money for the past three years.

It has been looking to sell non-core assets to cut borrowings and the "debt management side" was progressing well, Vagadia said, without giving details. (Reporting by Sumeet Chatterjee and Indulal PM; Editing by David Cowell)

FILED UNDER:

Religion and Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage