Suzlon’s Debt Restructuring Approved

Wind turbine maker Suzlon Group has won approval for a Rs.9,500-crore debt restructuring from its domestic lenders. Suzelon’s debt restructuring will be financed by a consortium of 19 banks, who have also agreed to enhance working capital facilities to the group by Rs.1,800 crore with a 10-year back-ended repayment plan.

But as part of the corporate debt restructuring, or CDR, package, the group’s promoters are required to bring in equity worth Rs.250 crore into the company within a certain period, stated Suzlon in a statement on Thursday. They did not specify a time frame. Of this, it infused Rs.62 crore via a share sale in December. The CDR is effective from 1st October.

Suzlon had in October decided to suspend its forecast for this fiscal year, saying that despite strong fundamentals and a $7.2 billion order book, liquidity constraints, a volatile market and the proposed debt recast would hurt its performance, Mint reported in October.

Suzlon has been given a two-year moratorium on principal and term-debt interest payments, a 3% reduction in interest rates, and a six-month moratorium on working capital. The package includes a conversion of interest costs—Rs.1,500 crore, which is two year’s interest payments—into equity over the next two years, Suzlon said.

“This is a major step forward in our efforts to achieve a sustainable capital structure,” said Suzlon Group chief financial officer Kirti Vagadia. “Additionally, we continue to be in constructive dialogue with majority of our bond holders across all the four series, and this development will help provide further visibility towards finding a consensual solution at the earliest,” he said.

Suzlon, which has lost money for three years, had failed to repay $209 million (around Rs.1,126 crore today) of debt on 11th October after bondholders rejected its request for a four-month extension. The default was the biggest on convertible bonds by an Indian firm, Mint reported in October.