Suzlon Writes Down Illinois Wind Farm After Debt SwellsNatalie Obiko Pearson
Suzlon Energy Ltd., the Indian wind-turbine maker seeking an extension on defaulted debt, wrote down the value of a U.S. wind farm used to secure an unpaid order.
Suzlon booked a 2.5 billion-rupee ($40 million) charge on Illinois’ Big Sky farm, it said today in an e-mailed statement. It has been trying to recoup $208 million for turbines sold in 2009 and last year wrote down the security by 4 billion rupees.
“We had to reassess the recoverable amount from Big Sky,” Kirti Vagadia, group head of finance, said in a phone interview.
Vagadia declined to comment on when Suzlon expects payment, saying it depends on a court case. Big Sky was formerly owned by a unit of Edison International. NRG Energy Inc. agreed in October to buy most assets of Edison’s bankrupt wind unit.
Suzlon, the fifth-largest turbine maker, failed to pay $209 million of bonds in October 2012 as prices slumped following its decision to run up debt through acquisitions. The company plans to raise $400 million in asset sales to repay creditors and is seeking a five-year extension on the defaulted notes, three people with knowledge of the matter said this month.
The company posted a net loss of 10.9 billion rupees in the quarter through December, compared with a loss of 11.5 billion rupees a year earlier. Group debt rose 16 percent to 158 billion rupees and orders fell to 913 megawatts from 1,104 megawatts.
“This has been a very challenging year,” Vagadia said. “We expect to get back on track in succeeding quarters.”
The services business in India, operating and maintaining 8,000 megawatts of turbines, will be spun off, he said. The division generates about 10 billion rupees of sales, he said.
“We can scale this up quickly with new opportunities,” Vagadia said. “It can generate an annuity-like income with good growth and good margins.”
Suzlon fell 0.9 percent to close at 10.95 rupees in Mumbai before its announcement, and has lost half its value in a year.