Suzlon needs to invest in property for wind farms and power distribution equipment to maintain its dominant share of the Indian wind market, which is expanding by 40 percent annually, according to Chairman Tulsi Tanti.

“We need some liquidity” to fund expansion, he said in an interview this week in Durban, South Africa, at international climate talks. There’s “nothing wrong” with founding investors, known in India as “promoters,” selling small stakes that will bring big benefits, he said.

Tanti’s remarks counter speculation by analysts and traders that the 1 billion rupees ($19.3 million) in proceeds may have been raised to meet margin calls on bank loans backed by shares. Samanvaya Holdings Pvt., a holding company of various promoters, sold 2 percent on Nov. 17 as Suzlon slid toward an all-time record close of 21.35 rupees and its second-worst month on record in the stock market.

“It’s not a good sign because it could mean they’re running out of cash,” said Raj Kothari, a London-based bond trader at Sun Global Investments Ltd., which owns Suzlon convertible debt. “Even if he’s going to put the money back in the company, that’s not reassuring,” Kothari said by phone.

Suzlon lost 40 percent in November for its second-worst month since it began trading in 2005, according to data compiled by Bloomberg. “With the share price falling, they may have to get money for the company to meet margin calls,” Kothari said.
Company Denial

The company denied that suggestion in an e-mailed response to questions from Bloomberg. Separately, it said promoters have been increasingly pledging shares against loans either to borrow more, to repay loans or for minor “top-ups” of collateral.

Declining stock prices in Asia’s worst-performing major market this year has forced Indian companies to pledge shares worth 1.1 trillion rupees as collateral to banks for loans as of Nov. 18, according to a report by Standard & Poor’s Indian unit Crisil Ltd.

“In the backdrop of inadequate disclosure levels on share pledging, investment in such companies exposes an investor to severe price volatility,” Crisil said.

Suzlon has $569 million of foreign-currency convertible bonds that mature next year, the company said in an e-mail response to questions on Nov. 30.

Tanti declined to say whether the company was approaching bondholders to buy back those notes before they mature. They’re apt to miss the threshold at which investors would convert them into equity. “We have a very clear plan,” Tanti said. “We are comfortable to repay bondholders in a time schedule.”

If the stock price continues to fall, Suzlon’s credit spread might increase, meaning its borrowing costs for new debt or for refinancing existing loans could also rise, Priyo Mayengbam, a Singapore-based analyst at Frontier Investment & Capital Advisors, said in a Nov. 18 response to questions.

A wider group of Suzlon’s founding shareholders had pledged a total of 76 percent of their holdings as of Oct. 21 in exchange for loans, according to data from the BSE Ltd. and National Stock Exchange of India Ltd. In total, 41 percent of the company’s outstanding shares have been posted as collateral.

When a large amount of shares are pledged, it reduces the founders’ ability to absorb volatility in the stock price, said Atul Gharde, a Hong Kong-based credit analyst at SJS Markets Ltd.

“Falling stock can lead to margin calls, which leads to more shares pledged or dumping of stocks by creditors to cover losses, a negative spiral,” he said.
Agencies

It is one of the leading renewable energy projects in that country. South Africa’s Minister for Energy, Dipuo Peters has announced her department’s approval of the facility, which will utilise Suzlon’s 2.1 MW turbines.

“South Africa needs more energy and it also needs thousands of decent and sustainable ‘green’ jobs. The wind energy sector is well positioned to deliver both of these requirements and more,” Suzlon Group Chairman and Managing Director Tulsi R Tanti said in a statement.

Earlier this year, Suzlon announced its partnership with African Clean Energy Developments (ACED), African Infrastructure Investment Managers (held by Old Mutual Investment Group (South Africa) and Macquarie Capital) and AFPOC.

ACED Managing Director Thomas Donnelly said, “This is an important milestone for the project, ACED and for South Africa. The Cookhouse project marks a major first step in our plans to build a 1 GW renewable energy portfolio over the next three years, with our 200 turbine agreement with Suzlon at the core of our plans.”
Agencies

This is GAIL’s fourth order with Suzlon, the first two being located in Gujarat. A part of these projects is meant for GAIL’s captive power requirement, with the remaining for power sales to the respective local power distribution utilities. Tulsi R Tanti, Founder, Chairman and Managing Director of Suzlon Group said: “This order underscores our position as a partner-of-choice for large wind investors in India. With the strength of our future development pipeline, our customised end-to-end offerings and our long term service capabilities, we are the best positioned to take advantage of the rapid growth of the Indian wind market.”
Agencies

The company has reported a consolidated net profit of Rs 48 crore for Q2FY12, compared with a loss of Rs 369 crore, a year ago. Revenue grew 34 per cent to Rs 5,071 crore on year-on-year basis.

 “Suzlon sold its remaining 26.06 per cent stake in gearbox-manufacturer Hansen which it acquired in 2006, to ZF for US $187 million. The deal concluded earlier this month,” the company said in a filing to the stock exchanges. As of September 30, 2011, its order book stood at US $6.5 billion (Rs 33,000 crore), executable over the next one year.

The stock opened at Rs 37.50 and hit a high of Rs 37.95 on the National Stock Exchange. A combined 2.99 million shares have changed hands on the counter till 0930 hours.
Business Standard

“We are happy to once again partner with Suzlon for this new project and count on Suzlon’s collaborative approach and time-tested service capabilities to continue our endeavor towards a greener tomorrow,” said Noel Selvanayagam, President, Senok Group.

Suzlon had earlier supplied a 10 Mw wind energy project to the Senok Group and the latest 21 Mw project will come up alongside the existing project site in Puttalm district of Sri Lanka..

Senok Group, is a diversified business conglomerate of Sri Lanka with interests across construction machinery, automotives, infrastructure development, tea, haulage and mining. The Group has an established presence in the clean energy space with its wind portfolio and investments in mini hydro projects.
Agencies

a) Wind energy technology has witnessed a quantum leap in the recent past compared to the last decade. Your comment
In any other power segment, wind also waded through a technological evolution. In the 80s and the 90s the companies–which took wind energy as a serious business–have given an equal thrust to research and development like developing the market. Now if I may say the existing technology is a sustainable, proven and can be adopted easily. Globally the countries have taken the desired step to move into renewable energy basket in the last decade, which has channelised more and more investments into the segment and also to the technological development. Going forward, we will see advanced wind turbines with higher capacities.

b) Elaborate on the S9X suite series which Suzlon has launched.
Wind energy segment as you know depends on the speed of the wind. Globally the players are facing saturation on the high speed wind terrains. This has forced the turbine manufactures to look at an advanced technology to tap the less speed wind –you have the S9X series, S95 and S97. This is with 2.1 Mw capacity.

c) What are the technological advancement in the S95 and S97 over S88 which is Suzlon’s flagship product till date?
The latest series has a 14 per cent energy yield over the S88 which is 14 million kilowatts more in 20 years. S97 is for lower wind terrains which can be easily tapped and is targeting the most power-starved countries. It reduces cost and has a more power output. This comes with enhanced aero dynamic efficiency for all 20 years of life, keeping in mind the accumulation of dust and other pollutant, which may reduce the efficiency. The series is based on a flexible speed technology. If there is a failure in the grid, then the turbine could can manage by itself, a smart technology in one word.  And above all, the S9X series has improved grid compliance.

d) Suzlon is a global player with supplies turbines to the global market as well as domestic market. How do you see the domestic market panning out?
There are countries which are much more developed in the wind segment in comparison to the Indian market. However, Indian market is growing in steady phase and we see a market in domestic supply as well.

e) Our country has shifted the concentration to renewable energy recently. Which are the states for which you see the potential markets for Suzlon?
Wind energy, though not a new segment for India, the states are taking much more interest in recent times. We see Gujarat, Maharashtra, Tamil Nadu, Madhya Pradesh, Rajasthan, Karnataka as potential market. And we see a healthy growth in tandem with the global market in India as well.

f) India prefers to install small turbines even now, what according to you are the possible reasons behind this?
The wind energy developers choose turbines depending on various factors like wind speed, logistical accessibility, grid connectivity and so on. I feel, in India, the infrastructure is a major concern. The roads are narrower; moving a larger wind turbine to the potential higher wind terrain which is in the rural parts of the country is a task by itself. So the developers prefer to choose the turbines which are easy to transport.

g) Globally the focus is shifting to offshore wind. How far is India from offshore wind energy?
There are more potential available on the onshore which is yet to be tapped in the country. Offshore wind farms are becoming popular as there is consistency in wind flow. However, India may take another four to five years before seeing offshore wind energy.

With the company expecting a 40 per cent increase in global revenue this fiscal year, Suzlon is also seeking a Chinese joint-venture partner to produce large turbines in China for the Chinese market, Tulsi Tanti said in an interview at the World Economic Forum in Dalian.

Suzlon, the world’s fifth-largest wind turbine manufacturer, builds 2-megawatt wind turbines in Tianjin and exports components from China for their assembly at the company’s facilities in India, the United States and Germany.
Agencies

The S9X wind turbines take advantage of low-to-moderate wind speeds. “The features of S9X-2.1 Mw turbine deliver a high return on investment for the customer,” said Andris Cukurs, CEO, Suzlon Wind Energy Corp. The project at full capacity can power more than 11,000 homes in Canada. Pursuant to a ten-year warranty, maintenance and service pact, Suzlon will provide operation services to the Amherst project.

Suzlon Group had secured 300 Mw orders from Canada in January this year
Agencies

Thomas Donnelly, managing director of AECD, said, “African Clean Energy Developments, along with its key stakeholders, are pleased to be working with  Suzlon Energy Limited on our flagship South African project , the Cook House Wind Energy Facility. Suzlon has demonstrated a clear commitment to the South African market, and to local economic development and job creation, two objectives of the Cook House Wind Energy Facility.”
Business Standard