Suzlon and REC Ltd Collaborate On Non-Fund Based Working Capital

Suzlon Group, India’s largest renewable energy solutions provider, has recently inked a definitive agreement with REC Limited, a state-run entity, for crucial working capital facilities. This strategic partnership is geared towards bolstering Suzlon’s capacity to meet its working capital needs, pivotal for executing its extensive current order book and prospective future projects.

Background: Suzlon’s Impressive Portfolio

Suzlon Group, a global player in the renewable energy sector, boasts an impressive 20.3 gigawatts (GW) of wind energy capacity across 17 countries. With operations spanning across 14 manufacturing facilities in India, the company is on a mission to expand its reach and efficiency in the renewable energy landscape.

Challenges in Working Capital and Financial Stability

In recent years, Suzlon faced challenges in securing adequate working capital, hindering its ability to scale up operations and grow its order book. The new financial arrangement with REC Ltd is viewed as a significant relief and a reflection of Suzlon’s enhanced financial stability.

REC Ltd: A Strategic Partner

REC Ltd, classified as a ‘Maharatna’ company and under the administrative purview of the Ministry of Power, specializes in providing long-term financial solutions, including loans, to entities in the country’s infrastructure sector. This partnership signifies a renewed collaboration, as REC Ltd has played a crucial role in aiding Suzlon’s past endeavors, including debt refinancing, ultimately contributing to Suzlon achieving a debt-free status.

Key Financial Details

The current working capital facility provided by REC Ltd is non-fund based, maintaining Suzlon’s status as a debt-free entity. Mody emphasized that this off-balance sheet facility would significantly improve commercial terms with customers and suppliers. The rolling nature of this facility allows Suzlon to execute current and future orders from its esteemed customers.

Future Prospects and Operational Impact

Suzlon anticipates that these working capital facilities will not only accelerate its operational activities but also optimize the use of its existing capacities. This, in turn, will enable faster ramp-up of operations and better utilization of installed capacities, addressing the challenges the company faced in increasing volumes and expanding its order book in recent years.

About Suzlon Group

Suzlon Group is a leading renewable energy solutions provider globally, with a diverse portfolio and a significant presence in wind energy. Headquartered in Pune, India, the Group has over 28 years of operational track record and a workforce of over 6,000 employees.

Summary

• Partnership Details: Suzlon Group has entered a definitive agreement with REC Ltd for crucial working capital facilities, aimed at meeting operational needs and executing its extensive order book.
• Global Reach: Suzlon, India’s largest renewable energy solutions provider, boasts an impressive 20.3 GW of wind energy capacity across 17 countries and operates 14 manufacturing facilities in India.
• REC Ltd’s Role: REC Ltd has been instrumental in aiding Suzlon’s past endeavors, including debt refinancing, contributing to Suzlon’s achievement of a debt-free status.
• Off-Balance Sheet Facility: The working capital facility provided by REC Ltd is non-fund based, maintaining Suzlon’s debt-free status and improving commercial terms with customers and suppliers.
• Operational Impact: Suzlon anticipates that these facilities will accelerate operational activities and optimize the use of existing capacities, addressing challenges faced in increasing volumes and expanding the order book.
• Future Growth Prospects: The collaboration positions Suzlon for sustained growth in the dynamic renewable energy sector, ensuring financial stability and meeting working capital needs.