Suzlon creates new shares as $4.95 million of bonds converted

New Delhi: Suzlon Energy Ltd., India’s biggest wind turbine maker, created 19.3 million new shares to cover convertible bonds that were exchanged for equity, according to a filing to the National Stock Exchange.

The company based in Pune now has 5.02 billion shares outstanding after foreign currency convertible bonds with a face value of $4.95 million were retired, the filing showed. A total of $547.9 million in bonds previously sold by the company are due to mature in July 2019 unless they’re traded in for stock.

Conversions of the bonds may hurt Suzlon’s stock price in the short term, said Tushar Pendharkar of wealth management firm Right Horizons Investment Advisory & Wealth Management. Unprofitable since 2009, Suzlon had its sharpest five-day plunge in 16 months, reviving concern about whether the bonds will be converted.

“The expectations from coming quarters would be very high and pressure would be on the management to sustain the basic” earnings per share, Pendharkar said. “Profit growth should surpass the conversion rate.”

Suzlon shares ended unchanged at Rs15.75 a piece on Monday in Mumbai trading. The stock traded as low as Rs13.75 on 3 February, falling below the threshold the company is required to meet to convert the bonds into equity. Executives led by chairman Tulsi Tanti have indicated they expect the bonds will be converted, reducing a key portion of the company’s corporate debt. Bloomberg

Source: Mint; 09 Feb 2016

URL: http://www.livemint.com/Companies/HwwsheRhU3bqiuFfRUO4SN/Suzlon-creates-new-shares-as-495-million-of-bonds-converte.html

Advertisements

Your View

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s