Suzlon has initiated legal proceedings against Edison Mission Group of the US towards the recover of dues of around $208 million.
In an e-mail response to Business Line’s query, Suzlon confirmed that it had initiated legal proceedings against the American company in the US, but said “it would be inappropriate to comment in detail as the matter remains sub-judice.”
Edison Mission bought 114 wind energy turbines from Suzlon in October 2009. The purchase was funded by a $ 206 million loan from Suzlon.
The machines were meant for Edison Mission’s 240 MW Big Sky wind farm in the State of Illinois.
Defective Machines
Edison Mission’s stand is that Suzlon’s machines were defective. Suzlon has said in its filings that Edison is simply unable to pay, and has filed for bankruptcy protection.
The Big Sky project is under a special purpose vehicle. Suzlon’s loans were guaranteed by the parent company, Edison Mission, and by a pledge of Big Sky’s assets, including direct and indirect ownership of the project.
Edison Mission has taken a stand that by a later agreement, it was released by the guarantee by Suzlon.
Re-payment obligations
Suzlon’s suing of Edison Mission comes at a stage where the Indian wind turbine major, which is also one of world’s leading wind turbine producers, is seeing a rollover of its re-payment obligations to its bondholders. Suzlon will meet the holders of its $ 220 million FCCB bonds on October 11, and ask them to give it further time to make the re-payment. > ramesh.m@thehindu.co.in