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Suzlon falls most in 3 months on faulty blade report

Suzlon Energy Ltd., India's biggest maker of wind-turbine generators, declined the most in more than three months in Mumbai trading after a report that it faces problems over faulty blades for a project in China. Suzlon fell 19 percent to 55.95 rupees, the most since Jan. 7. The stock has lost 10 percent this year.

Suzlon Energy Ltd., India's biggest maker of wind-turbine generators, declined the most in more than three months in Mumbai trading after a report that it faces problems over faulty blades for a project in China.

Suzlon fell 19 percent to 55.95 rupees, the most since Jan. 7. The stock has lost 10 percent this year.

Ahmedabad-based Suzlon shares fell 84 percent last year on concern that its equipment was faulty as some U.S. customers canceled orders after the company's blades cracked. The stock's decline forced Suzlon to scrap plans for a $368 million rights offer aimed at raising funds to buy an additional stake in German unit REpower Systems AG.

"The blades mentioned in the report are still in the testing stage," Chief Operating Officer Sumant Sinha said by phone from Mumbai. "We haven't even started production yet."

Suzlon is contracted to supply blades for 75 turbines in a project being managed by REpower in China's Shandong province, with an option for 75 more, the Wall Street Journal reported, citing people familiar with the matter. REpower rejected the prototype and ordered the equipment from elsewhere, according to the report.

"Suzlon has not delivered any blades to... more [truncated due to possible copyright]  

Suzlon Energy Ltd., India's biggest maker of wind-turbine generators, declined the most in more than three months in Mumbai trading after a report that it faces problems over faulty blades for a project in China.

Suzlon fell 19 percent to 55.95 rupees, the most since Jan. 7. The stock has lost 10 percent this year.

Ahmedabad-based Suzlon shares fell 84 percent last year on concern that its equipment was faulty as some U.S. customers canceled orders after the company's blades cracked. The stock's decline forced Suzlon to scrap plans for a $368 million rights offer aimed at raising funds to buy an additional stake in German unit REpower Systems AG.

"The blades mentioned in the report are still in the testing stage," Chief Operating Officer Sumant Sinha said by phone from Mumbai. "We haven't even started production yet."

Suzlon is contracted to supply blades for 75 turbines in a project being managed by REpower in China's Shandong province, with an option for 75 more, the Wall Street Journal reported, citing people familiar with the matter. REpower rejected the prototype and ordered the equipment from elsewhere, according to the report.

"Suzlon has not delivered any blades to REpower," the Indian company said in an e-mailed statement. "Those blades are still in the prototype phase of the manufacturing process."

Martifer Payment

Deliveries will start after testing and Suzlon is able to guarantee product quality, the company said.

Suzlon, which reported an unexpected loss last quarter after making payments to replace faulty equipment, is on schedule to pay 30 million euros ($40 million) this month and 175 million euros in May to Portugal's Martifer SGPS SA for buying its 22.4 percent stake in REpower, Sinha said.

"There's no reason why Martifer won't be paid on time," Sinha said. Suzlon's stake in REpower will rise to 91 percent after completing the purchase in May.

The company already holds 91 percent of the voting rights in REpower, according to its agreement with Martifer, which constructs metal frames for turbines.

Suzlon will use its own funds and overseas debt to pay for the stake in REpower, Sinha said on Jan. 30. "All options" are being considered with regard to selling shares, he had said.


Source: http://www.bloomberg.com/ap...

APR 16 2009
http://www.windaction.org/posts/19851-suzlon-falls-most-in-3-months-on-faulty-blade-report
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