Suzlon facing severe liquidity stress, posts H1 loss of USD 150.5m

Troubled Indian wind turbine maker Suzlon Energy Ltd (BOM:532667) yesterday reported a net loss to shareholders of INR 10.82 billion (USD 150.5m/EUR 137m) for April-September 2019, or the first half of its fiscal year.

This is a slight improvement from a loss of INR 11.97 billion a year earlier. The company has been focusing on fixing its capital structure this year so operations were at "a subdued level with minimal allocation of funding". Revenues fell by 33.6% to INR 16.36 billion in the first half and the gross margin decreased to 34.8% from 41.7%.

Suzlon has defaulted on loans, bonds and interest payments of a combined INR 29.79 billion as of September 30. After that date, the lenders of a subsidiary have recalled INR 40.88 billion in loans. In addition, certain trade creditors have filed insolvency proceedings against the company. All that has resulted in "severe liquidity stress", the independent auditor Deloitte Haskins & Sell LLP says, adding that the existing material uncertainty casts "significant doubt" about Suzlon’s ability to continue as a going concern. All will depend on the successful outcome of its Restructuring Plan and settlement with other lenders.

“We are committed and tirelessly working along with our lenders towards a holistic debt resolution and fixing the capital structure to align with our earning capability under the new market paradigms,” said CFO Swapnil Jain.

Suzlon’s net debt at the end of September stood at INR 122.26 billion.

(INR 100 = USD 1.39/EUR 1.26)

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