Luxury Car Industry the Luxury Term Paper

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The company is an energy firm that is invested in a broad range of energy. Suzlon's core assets include wind farms scattered around the world. Yet, wind farms are mentioned in the article among the assets that the company is seeking to sell. The company cites rapid growth in revenue, which should indicate that there is sufficient retained earnings to pay down the maturing debt, but the latest annual report shows that the company has lost money in the past two years. In the past year, Suzlon has increased the amount of equity on its balance sheet, so seems committed to a program of d eleveraging. It could be that the assets being sold are underperforming, and their sale would not only generate capital but would also allow the company to be more efficient going forward.

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It is interesting, though that the company has not chosen to renew the debt. While interest rates in India might be high, borrowing in the West is generally quite affordable and Suzlon has enough business outside of India that interest rate parity can be ignored -- the new loans would be paid with dollars or Euros. The company clearly wants to reduce the amount of leverage it has, perhaps anticipating a general upward trend in interest rates. Or Suzlon could simply want to increase the equity on its balance sheet. Either way, the article does not go into detail about this, leaving the reader to speculate as to why Suzlon would sell off assets from its core business to retire maturing debt next year, rather than finding another way to finance its business.

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"Luxury Car Industry The Luxury" (2011, October 30) Retrieved June 5, 2026, from
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"Luxury Car Industry The Luxury" 30 October 2011. Web.5 June. 2026. <
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"Luxury Car Industry The Luxury", 30 October 2011, Accessed.5 June. 2026,
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