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Suzlon Energy shares fall as company opens Rs 1,200 crore rights issue

Suzlon Energy shares fall as company opens Rs 1,200 crore rights issue

Suzlon Energy shares fall as company opens Rs 1,200 crore rights issue
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By Asmita Pant  Oct 11, 2022 12:42:42 PM IST (Updated)

Suzlon Energy's rights issue opened on October 11 and will close on October 20. The board of directors of the company had set October 4 as the record date for the Suzlon Energy rights issue.

Wind power major Suzlon Energy opened Rs 1,200 crore rights issue on Tuesday. The shares of of Suzlon Energy were trading 0.9 percent lower at Rs 7.6 on BSE at 9:21 am.

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Suzlon Energy's rights issue opened on October 11 and will close on October 20. The board of directors of the company had set October 4 as the record date for the Suzlon Energy rights issue.
In a press conference on rights issue, the company emphasised on the belief that rights issue will be a "success".
As part of its plan to raise Rs 1,200 crore, Suzlon Energy is offering 240 crore rights or shares for Rs 5 per equity share. The rights issue will reward energy stockholders with five equity shares for every 21 shares held at the record date of the rights issue.
According to a stock exchange filing by the company, a bidder will have to pay Rs 2.5 per equity share at the time of application and Rs 2.5 per share on a subsequent call. The tentative date for the rights issue allotment is October 31.
Suzlon will repay Rs 1,000 crore to the state-run REC from the rights issue proceeds. Of the Rs 2,800 crore 20-year REC loan, only Rs 800 crore is working capital facility and is priced at 19 percent.
In the press conference, Suzlon Energy said, "Funds raised via rights issue will be used for debt repayment and general corporate expenses." The company said that the partly paid shares will be listed on the exchanges and promoter and promoter group will participate in rights issue.
"Our problem is not lack of product, technology or servicing capabilities or orders. Even in our worst times we've been servicing all the turbines we installed and now as much Rs 1,800 crore of our total income of Rs 2,000 crore comes from servicing. Our real and only problem is financing," PTI quoted Ishwar Chand Mangal, chief executive for services division, Suzlon Energy.
Dilip Shanghvi, the founder of Sun Pharmaceuticals, had also expressed his intention to participate fully in the rights issue, according to the company. To support the debt-ridden company, Shanghvi bought a 23 percent stake in the company earlier in 2015. In 2012, Suzlon became the country's biggest defaulter on convertible bonds.
On October 3, the promoters of Suzlon, the Tanti family, had made a statement to the exchanges re-confirming their participation in the proposed rights issue. This came after the demise of CMD Tusti Tanti on October 1 following a cardiac arrest.
The Tanti-led promoter group, which includes members of his family and siblings, collectively hold 14.5 per cent in the company after lenders converted some loans into an equity holding in the company as a part of a debt restructuring plan.
"In continuation to the announcement dated October 2, the promoters and the promoter group have reconfirmed their participation in the proposed rights issue and have expressed their intention to subscribe to the full extent of their rights entitlement," Suzlon Energy had said in a regulatory filing.
The driving force behind Suzlon's efforts for revival, founder-chairman Tulsi Tanti passed away on October 1 following a cardiac arrest. After his death,
his brother Vinod Tanti was appointed as the chairman and MD for three years. The Pune-headquartered green energy company was founded in 1995 by Tulsi Tanti.
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