India

India

Suzlon joins Enercon and Senvion on OEM crisis list

Suzlon's ability to continue as a going concern is in "significant doubt", according to the Indian wind turbine OEM's auditor in its latest report.

India's plans for wind power growth remain stuck with grid connection issues
India's plans for wind power growth remain stuck with grid connection issues

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Losses widened — a net loss of INR 7.78 billion (US$108 million) in the second quarter of its financial year – against INR 2.8 billion one year earlier.

In the report attached to its Q2 financials, auditors Deloitte, Haskins and Sells stated Suzlon has "defaulted in making payments" to creditors, with some lenders filing for insolvency proceedings against the manufacturer. 

The accountants added that offers from potential investment offers, rumoured to be from OEM Vestas and investor Brookfield, have been withdrawn.

Suzlon CFO Swapnil Jain agreed that the company's "liquidity challenges" meant it was operating at a "sub-optimal level".

In its report, Deloitte wrote that these conditions "indicate a severe liquidity stress, and consequentially, existence of a material uncertainty that may cast a significant doubt about the group’s ability to continue as a going concern."

But it noted that Suzlon’s management was "reasonably confident" about the potential success of its financial restructuring plan.

A Suzlon spokesman told Windpower Monthly that, under the plan, Suzlon envisages splitting total debt into sustainable debt and unsustainable debt.

The plan's success would hinge on creditors' acceptance, Deloitte added.

Suzlon CEO JP Chalasani remained optimistic, citing "some healthy growth" in installation figures in India, with about 1.3GW added in the first half of the country’s financial year, more than double the 569MW added in the same period one year earlier.

He added: "India is expected to be a relatively high volume market once the transitional problems and policy uncertainty are addressed."

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