Suzlon Energy, the world's fifth largest wind turbine maker said on Thursday that it has successfully renegotiated financial covenants and amended key terms of its senior bank loan facilities taken for the acquisition of REpower Systems AG (REpower) in 2007.
In February 2007, Suzlon had raised 1,575 million Euro debt facilities from a consortium of 24 international banks in order to fund the acquisition of REpower and Hansen Transmissions International NV.
As a result of the renegotiation, the banks have relaxed the financial covenants for the balance tenure of the loan and Hansen Transmission International and its subsidiaries would be included for the computation of the covenants, Suzlon said in a release to the stock exchanges.
Banking covenants are typically agreements between a company and its creditors, which stipulate limits for the company in terms of interest cover, working capital and debt service cover to enable the company maintain a balance between the company's debt and equity capital.
Suzlon also received higher thresholds with respect to additional indebtedness for the company and its subsidiaries. "As of 31st March 2009, the total outstanding against the said facility was 504 million Euro funded facility and a 205 million Euro guarantee facility," the release added.
Earlier this week, Suzlon said that three of its promoters have offloaded six crore shares representing a 4% stake in the company for an estimated Rs.564.60 crore to help part-finance the buyout of the stake held in REpower from Martifier SGPS.
Rambhaben Ukabhai, one of the promoters, sold 2.75 crore shares representing a 1.84% stake, Girish R Tanti sold 2.35 crore shares or a 1.57% stake and Nidhi Tanti sold 90 lakh shares representing a 0.60% stake via separate open market transactions. These shares were sold at a discount of up to 3% to the stock's closing price on May 22 and Citigroup managed the transaction.
Pursuant to the deal, the promoter group holding in Suzlon came down to around 60% from 65.83%. In a similar deal on May 13, promoters Tulsi Tanti and family had sold around 30 million shares or nearly a 2% stake in the company.
Suzlon, which holds a 76% stake in REpower, is on course to increase its stake to 91%.Suzlon hasn't announced quarterly results for the March quarter yet and has proposed to consider and approve only the audited financial results for the FY09 before June 30,2009.
On the BSE, Suzlon was last trading at Rs.91.70, up 2.17% from its previous close.
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