According to sources, Suzlon is looking to raise USD 700 million at a tenure of three–six years via the ECB route. Also, Shipping Corporation, we understand is looking to raise between USD 200–300 million at a tenure of eight–ten years via ECBs. Similarly, the Delhi International Airport which is run by the GMR Infra group is looking to raise about USD 300 million for eight–ten years. Why this new found to raise funds via ECB? That’s because of the depreciating dollar and the falling rates in the global market as the risk appetite returns.
Dollar funding has become cheaper as compared to the rupee loan especially for companies which have their revenues in dollars. So it gets easier for them. These companies are raising these funds for their ongoing capital expansion plans. Suzlon shall raise almost 3000-3500 crores by this exercise and shall be a major step towrads debt restructuring.
DEAR rpg,suzlon is in a precarious position financially and may not survive any major shock at this stage.we all can only pray that it can bluff its way out
For companies having their revenues in USD, loans in USD makes sense. It acts as a natural hedge. Downside is that the margins on sale come down when USD depreciates. Costs are normally based on home country currency.
It is risky for any business to be dependent on currency play. Fo Suzlon, the main problem will be how to convert their stock in cash. Suzlon is sitting on more than 12000 cr debt.
Regards
| NIFTY 
