Germany-based REpower Systems, in which India’s Suzlon Energy holds 83.43%, has signed an agreement for a syndicated loan of €600 million.
Germany-based REpower Systems, in which India’s Suzlon Energy holds 83.43%, has signed an agreement for a syndicated loan of €600 million.
A statement issued by REpower on May 26 said the agreement was signed with a consortium of 12 banks and financial institutions, including Bayerische Hypo-und Vereinsbank AG, Deutsche Bank AG, Dresdner Kleinwort, HSH Nordbank AG and The Royal Bank of Scotland Plc.
Though Suzlon did not comment on the development, a source close to the wind energy player said the loan being raised by REpower has nothing to do with the Indian firm or its operations. “That is strictly for its own capital and operational expenditure,” the source said.
The source added that the Pune-based Suzlon does not have domination agreement with REpower and doesn’t have a say in its financial decisions. “Suzlon is currently focused on the forthcoming block deal, wherein it plans to raise stake in the company to over 90%,” the source said.
The REpower statement said the 3-year loan consists of one tranche of €500 million for provision of warranties and guarantees and another tranche of €100 million for working capital.
On May 29, Suzlon paid €87.6 million (about $124 million) to the Martifer Group of Portugal as the third tranche for its stake in REpower.
The Indian company has to pay another €87.6 million to Martifer to buy out its stake completely. Once the full payment is made, Suzlon will own 90.72% in REpower.
The final payout is due on June 5.
Under a revised schedule agreed upon in December last year, Suzlon paid the first tranche of €65 million in December 2008 and €30 million in April 2009. This hiked its stake in REpower to 76%.
Suzlon is neck-deep in debt and has for long been searching for options to reduce its liabilities.
In May, it successfully restructured its liability on foreign exchange convertible bonds (FCCBs) to the tune of $500 million.
The promoters of the company also sold 4% of their stake last month to raise Rs 569 crore to part-finance the deal.
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