Suzlon FCCB Default - A Blessing in Disguise
This is a good development for business. Now the company will be able to focus its resources in creating value in the business instead of paying it to unsecured lenders.
pune (I-Newswire) October 13, 2012 - This is a good development for business. Now the company will be able to focus its resources in creating value in the business instead of paying it to unsecured lenders.
Even when Suzlon paid the first FCCB in July without any holdbacks there was concern that maybe it would’ve been better to instead put that money back into the business which would’ve created better value. Though the company showed great commitment in paying the bond holders.
It is actually good news for Suzlon vendors, employees and customers. Everyone knows that there is great value in the Suzlon business. They also have a great order book. But the business was suffering because of the debt payouts. This will allow the company to put money in the business and honors commitments to employee’s vendors and customers.
Suzlon primary lenders and banks are completely aligned with the company and totally support their strategy of Funding business at this time that is the best news.
This will result in a stronger business and company in the long run.
As long as the company can create value in the business capital structures will work out.
The company was right to not pay now and ask for an extension. The bond holders have acted Irresponsibly.
Why did the bond holder do this?
All the commercial benefits of the extension are now lost to the bond holders.
These devalued bonds can be easily traded making it a very big loss making move for the bind holders.
The company actually doesn't suffer since these are unsecured lenders and the only way forward is litigation and negotiation. They have no choice and business will not be impacted at all.
About Suzlon Group:
The Suzlon Group is ranked as the world’s fifth largest* wind turbine s More..upplier, in terms of cumulative installed capacity, at
the end of 2010. The company’s global spread extends across Asia, Australia, Europe, Africa and North and South America
with over 18,000 MW of wind energy capacity installed in 28 countries, operations in 32 countries, a workforce of over
13,000. The Group offers one of the most comprehensive product portfolios – ranging from sub-megawatt on-shore turbines
at 600 Kilowatts (KW), to the world’s largest commercial 6.15 MW offshore turbine – built on a vertically integrated, lowcost, manufacturing base. The Group – headquartered at Suzlon One Earth in Pune, India – comprises Suzlon Energy
Limited and its subsidiaries, including REpower Systems SE. Visit us at www.suzlon.comLess..
Phone : 918888817396
Published On:October 13, 2012
Print Release:Print Release
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