Indian billionaire Dilip Shanghvi has agreed to provide as much as 38 billion rupees of security for Suzlon Energy to help Asia's second-largest maker of wind turbines fill orders and return to profit.
The security from the Shanghvi family would make it easier for Suzlon to obtain more bank guarantees and letters of credit to ramp up its business, said Sudhir Valia, an executive director at the billionaire's Sun Pharmaceutical Industries.
Suzlon shares jumped as much as 7.3 per cent on Tuesday to the highest level since July last year before closing 3.8 per cent ahead.
Suzlon is planning to build factories as it seeks to recover from India's biggest convertible bond default 2½ years ago. The company said earlier this month that it would sell a 23 per cent stake to Shanghvi's family for 18 billion rupees, weeks after it agreed to offload its German unit for €1 billion.
The company's current working capital level was 50 per cent of its order book, said Valia, who is Shanghvi's brother-in-law.
According to Valia, the priority is for Suzlon to stop posting losses.