New Delhi: Suzlon Energy is seeking up to 45 more days from bondholders to repay foreign currency bonds maturing in June while it works on raising as much as $300 million in loans, the wind turbine maker said on Friday.
Suzlon, the world’s fifth-largest wind manufacturer by cumulative installed capacity, needs to repay $360 million of foreign currency convertible bonds in June and $207 million due in October.
Suzlon’s foreign currency bonds maturing this year have conversion prices of Rs 76.68 and Rs 97.26 per share, well above the current price Of 20.10, making them unattractive for bondholders to convert into shares.
The shares have lost about 60% in the last year, partly on concerns about Suzlon’s ability to repay debt.
Suzlon, the owner of Germany-based REpower, is “at an advanced stage” of raising funds to refinance the foreign currency bonds, Kirti Vagadia, chief financial officer, said in a statement.
“In order to ensure there is adequate time for the necessary requisite approvals and administrative documentation, we have asked our bondholders for an extension,” he said.
Suzlon is raising funds from about 20 lenders and will not need to raise more to repay bonds maturing in October, Vikas Rathee, head of corporate finance, told Reuters. He didn’t name lenders or give details on the cost of debt.
The lure of cheaper funds overseas and a rising stock price at home prompted many Indian companies to issue foreign currency convertible bonds to fund their expansion in the past few years.
But a flagging stock market and sharply depreciating rupee have wiped out the benefits of overseas debt and put companies such as Suzlon in a spot as these bonds come due for repayment.
The rupee is down 24% against dollar since April last year.
Suzlon had Rs 1915 crore of cash and consolidated net debt of Rs 11790 crore at the beginning of 2012. Its net debt to equity ratio was 2.1 and it had receivables of Rs 7323 crore.