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Suzlon implements $1.8 billion debt recast plan

According to reports, wind turbine maker Suzlon today said it has implemented the $1.8 billion (Rs. 9,500 crore) debt restructuring package that includes preferential allotment of shares to its lenders.

The completion of the Corporate Debt Restructuring (CDR) package would pave the way for Suzlon to normalise “business operations” and improve overall performance.

Besides lenders’ owning shares of Suzlon, the plan would also provide a two-year moratorium on principal and term-debt interest payments.

Suzlon said the CDR package has been fully implemented with the signing of the Master Restructuring Agreement (MRA), and the preferential allotment of equity shares to its lenders.

The debt recast of Rs. 9,500 crore ($1.8 billion), one of the biggest by an Indian company, was formally approved in January this year by the company’s domestic lenders – a consortium of 19 banks.

“The package covers a 10 year door-to-door back-ended repayment plan; reduction in interest rates by approximately three per cent; a two year moratorium on principal and term-debt interest payments; enhancement of working capital facilities, and equity allotment to the CDR lenders,” the company said in a statement.

As part of the debt recast, Suzlon’s promoters have infused Rs. 125 crore.

According to Suzlon, the first phase of the allotment for 30.24 crore shares at an issuance price of Rs. 18.51 per piece to the lenders was completed today.

The new shares issued would be subject to a lock-in period of one year from the date of allotment.

“The focus is now 100 per cent on normalising business operations, driving results from Project Transformation, focusing on the execution of our enviable $7 billion orderbook, and delivering a healthy performance in FY 2013-14,” said Kirti Vagadia, Suzlon Group’s head of finance.

In October 2012, Suzlon had announced plans to restructure its debt under CDR mechanism.

The company allotted an additional 1.2 crore equity shares on preferential basis to Samimeru Windfarms Private Ltd in consideration of an amount of Rs. 22 crore contributed by Samimeru as a part of the promoter contribution under the CDR package, the statement said.

“The total new allocation takes the share capital base of the company to 209 crore shares, up from 178 crore shares,” it added.

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