Business Case Studies, Financial Management & Corporate Finance Case Study, Suzlon Energy, Financing Problems

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Case Title:

Suzlon Energy: Financing Problems

Publication Month & Year : July 2009

Authors: Swapna Pragada & D. Satish

Industry: Renewable Energy

Region:India

Case Code: FM0007

Teaching Note: Available

Structured Assignment: Available

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Abstract:
The primary objective of the case is to deal with the problems encountered by Suzlon Energy Ltd., due to the liquidity crisis that surfaced in the company in the year 2008. Suzlon started as a very small company to provide alternate source of energy to the textile company of the founder,Tulsi R.Tanti.With in no time, it evolved as the world's fifth largest manufacturer of wind turbines. However, the company faced several problems in the year 2008 due to over leveraging, increased costs involved in replacing the faulty blades that it supplied to its US and Portugal clients and slow down in sales due to the global financial downturn. The liquidity crisis was further compounded bythe acquisition commitments for stake in REpower. Suzlonis looking at various financing options tomeet its commitments. Given these pressures, what are the different alternative finance sources, which Suzlon can tap in order to come out of the liquidity crisis?

Pedagogical Objectives:

  • To understand the various financing options available to run a business
  • To understand the nature of business of Suzlon and to reflect upon various funding requirements through its growth phase
  • To evaluate the reasons for the current crisis in Suzlon
  • To analyse the various options available for Suzlon to come out of the liquidity crisis.

Keywords : Long-term financing; Private Placement; IPO; Initial Public Offering; Liquidity Crisis; Rights Issue; MBA; Principles of Financial Management; Finance for Managers; Managerial Finance; Financial Management; Corporate Finance; Financial Management Course Case; Course Case Maps; Course Case Packs; Business Finance; Financial Management Course Case Pack

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