Suzlon Is One Of The Few Companies Who Have Honored Their FCCB Commitments In Recent Times
Not just one but 11 banks show confidence in Suzlon with SBI leading the way! Way to go Suzlon. Suzlon is one of the few companies who have honored their FCCB commitments in recent times. That is very commendable. While everyone was spreading rumors they have done what they have committee.
- (1888PressRelease) July 29, 2012 - Indian banks are more conservative and pragmatic and they have shown confidence in Suzlon's business model and management. I think this is a very strong indication for everyone about the fundamental strength of Suzlon. The Suzlon book price is around 30Rs. The current fall to 18Rs was mainly due to the negative hangover of the FCCB repayment. Now that, they have paid as per commitment the share price is sure to go to over 30Rs. It is a great time to buy Suzlon.
The current lending actually reduces the Suzlon debt by around INR200 crores. That is fantastic and a very strong step into a great future. There is still debt that needs reduction but this is a great move. Suzlon has surprised everyone not just by repaying the FCCB on time but also because this lending is actually a very low interest and the lowest interest borrowing in the Suzlon debt basket
The second tranche of FCCB payment will only come up in October, and is much smaller almost one third of current repayment, there is enough time to handle that. Also with the current payment on time the confidence in the remainder debt payment is very high
Suzlon energy, India's largest wind turbine manufacturer demonstrated great strength and commitment by repaying it first tranche of FCCB repayment in time. The company was very well backed by a consortium of around 11 banks, most of them nationalized. This shows the fundamental strength of the company's business model and management team. The company has been plagued by huge debt issues and this repayment comes as a relief also reducing the overall debt burden by around INR200crs. Sources claim that the current lending has been acquired at a very low interest cost and the lowest interest cost within the Suzlon debt portfolio. The market can now expect the company's share price which had crashed to under INR18 to rise to over INR 30 in the short term.
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