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Suzlon slides for second day running as management explains REC repayment math

Suzlon slides for second day running as management explains REC repayment math

Suzlon slides for second day running as management explains REC repayment math
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By Asmita Pant  Oct 12, 2022 4:17:21 PM IST (Published)

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 shares of wind power major Suzlon slumped 2.9 percent on Wednesday. The company opened Rs 1,200 crore rights issue on Tuesday. Stock of the company was trading 2.3 percent lower on BSE at 12:48 pm.

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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.
The company will repay Rs 1,000 crore to the state-run REC from the rights issue proceeds. A total of Rs 900 crore would get reduced from the Rs 3,200 crore as on June 30, said Himanshu Mody, Group Chief Financial Officer at Suzlon Energy.
"Of course, in addition to that there are scheduled repayments that we have as per the loan agreements, which the company's cash flows are robust enough to be met on a regular basis from time to time," Mody added.
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.
"Our incoming Chairman and Managing Director, Vinod Tanti and myself, both of us together, have decided to manage the overall role, which Tulsi Bhai was playing. So, most of the internal side of the business would be taken care of by our chairman, Managing Director, Vinod Tanti, and I will take care of the external stakeholders and the other matters from the external part," Girish Tanti of Suzlon told CNBC-TV18.
Mody said that a large component of the interest cost, for FY21- FY22, or the first quarter of FY23 was non-cash which was resulting from that 20-year instruments by way of optionally convertible debentures and certain preferential preference shares that were issued to erstwhile lenders. He said that these no longer exist on the balance sheet as they have converted into listed shares of the company and allotted those to the lenders.
"Therefore, the non-cash interest costs will significantly come down, it will become virtually zero," Mody said.
Talking about the future of the company, Mody said that there are enough tailwinds in the industry. "If you see FY22, we did an 800 megawatt delivery or revenue recognition, as we call it. If we see our active order book currently available with us today, based on some of the recent announcements made by the company, we have about one gigawatt of active orderbook confirmed available with the company today."
"I think we are definitely on the path of good performance for the company. Of course, from the numbers perspective, our Q2 results after the rights issue would be out by end of this month or early November as in when the board reconvenes and the markets would hear about the performance at that point in time."
On Tuesday, the company bagged a new order to develop 144.9 mw wind power projects for Aditya Birla Group. Suzlon will install 69 units of wind turbine generators (Wind Turbines) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 2.1 MW each. The project is located at sites in Gujarat and Madhya Pradesh and is expected to be commissioned in 2023.
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