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Tuesday, December 7, 2010

SUZLON on Restructuring : Merges Subsidiaries

Wind energy major Suzlon Energy on 6th Dec 2010, said that its Board of Directors has approved the acquisition of the 'Tower Business Division' of Suzlon Towers and Structures Ltd and 'Operations and Maintenance Division' of Suzlon Infrastructure Services Ltd. Both are wholly owned subsidiaries of Suzlon and the merger would be done subject to receipt of all statutory and regulatory approvals.
Shares of Suzlon Energy closed at Rs 52.25, up 1.06 per cent on the BSE.

Some of the details of this Subsidiaries - As on 31st March 2010.

SUZLON TOWER & STRUCTURE LTD.
Issued,Subscribed,Paid up Capital - Rs. 45 crs.
Reserves & Surplus - Rs. 195.61 crs.
Total Assets - Rs. 506.70 crs.
Turnover - Rs. 533.11 crs.
Profit before Tax - Rs. 31.91 crs.
Provision for Tax & Deferred tax - Rs. 10.78 crs.
Profit After Tax - Rs. 21.13 crs.


SUZLON INFRASTRUCTURE SERVICES LTD.
Issued,Subscribed,Paid up Capital - Rs. 142 crs.
Reserves & Surplus - Rs. 121.58 crs.
Total Assets - Rs. 967.36 crs.
Turnover - Rs. 1105.28 crs.
Profit before Tax - Rs. 86.95 crs.
Provision for Tax & Deffered tax - Rs. 29.89 crs.
Profit After Tax - Rs. 57.06 crs.

So with the merger the networth of Suzlon will be increased by around Rs. 317 crs, which translates into an increase in its book value by about Rs.1.82 per share. Suzlon's debt of Rs. 9252 crs. Reserves & Surplus - Rs.5892 cr.(as on 30 Sept 2010)

12 comments :

  1. Suzlon is one of the best in wind energy segment.Nice info about suxlon.

    ReplyDelete
  2. Hi Mr.Singh,
    Thanks for reading my blog...No doubt about Suzlon.If the debt part is solved this company will rule the Nifty...Suzlon is the world's 5th largest wind turbine manufacturer.
    Do read my past posts on SUZLON click on -

    http://bhavikkshah.blogspot.com/2010/09/orissa-minerals-development-company-ltd.html

    http://bhavikkshah.blogspot.com/2010/06/suzlon-energy-rights-issue-details.html

    http://bhavikkshah.blogspot.com/2010/06/suzlon-declares-rights-issue-at-rs63.html

    http://bhavikkshah.blogspot.com/2010/06/suzlon-energy-annual-results-insights.html

    http://bhavikkshah.blogspot.com/2010/05/suzlons-fccb-holders-waives-fine.html

    http://bhavikkshah.blogspot.com/2010/04/little-story-on-markets-on-demand.html

    ReplyDelete
  3. Hi Bhavik,

    Thanks for the information. Good initiative. Keep on giving us such useful information
    Regards,
    Ankur Khakhar

    ReplyDelete
  4. HI Ankur,
    Thanks for reading my blog& appriciating my efforts, on this I would only say that the motive of writing this blog is to spread awareness, about right investing..People buy stocks on the TIPs given by the so called "Analysts" and end up lossing money the classic example is Shree Ashtavinayak it went up from Rs.11 to Rs.49 and now trading at Rs.9 inspite of its recent movie DABANG made an profit of Rs.220 cr..Guys this profit was meant for shareholders & not for promoters alone.....
    People donot see whether this companies have good assets or not they just buy stocks hoping to be multi bagger but end up being MULTI BEGGER...
    Any ways do visit again -
    HAPPY INVESTING..
    www.bhavikkshah.blogspot.com

    ReplyDelete
  5. Hi Bhavik, Great Article , the only issue is that Suzlon is not able to service the loans, the retained earnings have been utilized and if they aren't able to service the debt this year, they can be bankrupt,or issue fresh equity, what are your thoughts on the ability to service their debt.

    ReplyDelete
  6. Hi Bhavik,
    You really write gr8..
    but i would like to draw ur attention on Suzlon
    read here - http://economictimes.indiatimes.com/features/sunday-et/special-feature/suzlon-revival-in-sight-but-needs-lot-more-cash-just-to-survive/articleshow/7187802.cms

    ReplyDelete
  7. Hi Nikhilesh...
    This is on context of above comment by the blogger..This is about Shree Ashtavinayak.
    Company issued FCCB`s worth 34.25 millions USD in the year 2007 out of which 14 million were converted and the rest were due to convert in september. Company cancelled the board meeting slated for conversion of these FCCB. Company says that they got a court order from some minority shareholders (Holding around 2-3 %) to stop the conversion. This really looks like a pure plot on the companies part where in company is trying to stop the conversion at higher price and which in some way even bring down their promoter holding (Around 32 % now). A conversion at a higher price is always healthy for the stock I think so but here you go with this pure Hindi movie drama where in they could stop the conversion on some stupid lame excuse of stay order which they say got it form the court. This dhillin mehta thinks that FCCB holders are blind and they cant see the plot. As far as i see each and everyone (FII Community) will sell their shares until and unless they are completely sold out and no foriegn institution will ever invest in this company. As i see after this selling subsides Dhillin mehta will have an amazing oppurtunity to buy back shares and peatnut prices and increase his holding in the future. Cash earned from previous three blockbusters will be quite significant to buy back the shares and increase the promoter shareholing which in some way will again jack up the price. This is how business works for Dhillian Mehta and his team.

    ReplyDelete
  8. Hi Bhavikk
    Heard that Gamesa buying Suzlon for Rs.77/sh...valuing SUZLON for $3 billion ...Is it true...

    ReplyDelete
  9. Hi Friends..
    I also did some reasearch on GAMESA
    Its total shares are 24.571 cr Shares.
    Market Cap of 1,425.36 million EUROS
    Current price - 5.80 Euros(Rs.344.96)
    P/E - 24.7
    52 Week H/L- 12.50 Euro/4.49 Euro
    AS ON 31 DEC 2009
    PAT - 11.458 cr Euros
    EPS - 46.98 cents
    CASH - 80.144 cr Euros
    Book Value - 421.55 cents/share.
    REVENUE - 318.708 cr Euros 31 Dec 2009
    EBITDA - 17.672 cr Euros
    FORGET IT FRIENDS EVEN IF TANTI SELLS THE MONEY WILL GO TO HIM AND AS PER MY VIEW WEAK HANDS WILL EXIT & STRONG HAND WILL DEFINITELY BRING SUZLON OUT OF DEBTS. BUT NOT GAMESA BCOZ IT HAS CASH OF 80.144 CR EURO (Rs.4766.60 CR) & DEBT IS AT 333.653 CR EURO (Rs.19844 CR)

    ReplyDelete
  10. Hi Nikhilesh..
    Thanks for reading my blog...
    As for the Suzlon, I agree that it has the debts of Rs.9,252 cr & Reserves of Rs.5,892 cr.(which can take care of losses).
    As for the question on loans repayments then here's the answer –
    Suzlon took loans for acquisition of Hansen & REpower. They sold some of the stake in Hansen but they eventually raised their stake in REpower by 14.4 % to current 90.50%.
    Total share capital of REpower as on 31st March 2010 – 91,99,829 shs.
    Suzlon holds 90.50 % of REpower.
    Free float of REpower is 9.5% - 8,73,983.755 shs
    Current Market Price – 117 Euros/Sh (873983.755 x 117 Euro/sh = 102.256 m Euro)
    That would be around Rs.613.53 cr, According to German laws Suzlon has to buy the entire 9.5 % of REpower in order to integrate REpower’s assets into itself.
    NOW , REpower has Total Asset of 1,380.3 m Euros; Shareholders Fund – 475.97 m Euros, EPS – 6.34 Euro/Sh; Dividend paid 1.54 Euro/sh; Total debt of 556.6 m Euros;
    Debt/Eq – 0.40. NP – 57.93 m Euros ;
    So, my friend SUZLON adds Rs.2855.82 cr to its books by just paying Rs.613.53 cr.
    DEBT OF SUZLON Rs.9,252
    RESERVES OF SUZLON = Rs.8747.82 cr (5,892 + 2855.82 of Repower)
    D/E ratio will be 1.05. NOT BAD..
    The stake buy of REpower’s 9.5% will cost Rs.613.53 cr which is possible as Suzlon has recently completed its rights issue of Rs.1180 cr & has debt restructured ..OFFCOURSE this may take long time, say upto a year but fundamentals will improve once this REpower stake is bought..
    NOW WHAT YOU THING ABOUT THISSSS
    www.bhavikkshah.blogspot.com

    ReplyDelete
  11. Hello Bhavik,

    I read your post and really appreciate the kind of analysis and insight you have brought into picture
    My only concern is about the stock price going forward.. do you have a clue about where it is headed towards (I am looking at a 1-2 year perspective)

    Thank you,

    DowGuru as on Moneycontrol

    ReplyDelete
  12. HI DowGuru,
    Thanks for reading my blog I am glad to know that you liked my writing..As per my view the suzlon will head towards the price of Rs. 65.00 which I belive a fair value of Suzlon...As for 1-2 year my target would be Rs.100.
    Thanks, Do visit again !!!

    ReplyDelete

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