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Renewable Energy Push Eases Financial Woes of Suzlon Energy

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Suzlon Energy, once India’s largest (and the fourth largest globally) wind turbine manufacturer, expects to emerge from the darkest financial period since it was founded, by March of next year.

Suzlon Energy chairman Tulsi Tanti recently told media personnel that his company is expected to exit debt restructuring by the end of the current financial year.

The company had to undertake debt restructuring after amassing a huge amount of debt following the ill-timed acquisition of Europe-based RePower just before the global economic crisis of 2008.

While the acquisition of RePower made Suzlon Energy the fourth largest wind turbine maker in the world, it also spelled doom for the Indian company.

Once the leading wind energy company in India, Suzlon lost the edge to Gamesa which has been the leading original equipment maker for the last four consecutive years.

Lost market share also meant a sharp reduction in revenue and profits. Listed at the Bombay Stock Exchange and the National Stock Exchange, shares of Suzlon Energy touched an all-time high of Rs 460 (US$11.71) in January 2008. The company saw a massive and sustained correction from then on, hitting an all-time low of Rs 5.72 (US$0.08) in 2013. The share price of the company continues to trade below Rs 20 (US$0.3).

Suzlon’s fortune turned with the change of government in India. The Modi-led government announced very aggressive renewable energy targets, especially for the wind and solar power sector. Citing this opportunity, one of India’s leading billionaires picked up a stake in the company.

Suzlon then moved into solar EPC and secured several projects. The strategy was to develop projects and sell them off to interested investors. The strategy seems to be working, as Hong Kong-based CLP recently acquired a 100 MW solar power project from the company.

And although Suzlon sold RePower last year, at a loss, it holds rights to the company’s offshore wind energy technology. This may prove extremely critical for the company as the government plans to open up the offshore wind energy market.

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