Home >Companies >Suzlon says bondholders approve restructuring plan

Mumbai: Wind turbine maker Suzlon Energy Ltd on Thursday said the holders of each series have approved the proposed restructuring of its existing bonds, including the terms and conditions for the new foreign currency convertible bonds, or FCCBs.

The existing bonds were due in October 2012, July 2014 and April 2016.

In May, Suzlon announced a restructuring of its FCCBs worth $485 million for five years after nearly one-and-a-half years of negotiations with bondholders across the US, Europe and Asia.

This is one of the largest bond restructuring deals in the country. Suzlon failed to repay $209 million of debt on 11 October 2012 after bondholders rejected its request for a four-month extension. The default was the biggest on convertible bonds by an Indian firm.

The company has secured approvals from the banks’ empowered group of corporate debt restructuring (CDR) cell and the Reserve Bank of India (RBI) for the restructuring.

Suzlon, which is going through a 9,500 crore CDR exercise, reported a net loss for the quarter ended 31 March to 603.45 crore compared with a loss of 1,912.72 crore in the year-ago period. In January 2013, Suzlon’s lenders, a consortium of 19 banks, agreed to enhance working capital facilities to the group by 1,800 crore and announced a 10-year deferred repayment plan. The consolidated debt of the Suzlon Group stood at 14,971.29 crore on 30 September, as per the latest data, Mint research shows.

“Pursuant to the approvals received, 100% of 0% October 2012 bonds, the 7.5% October 2012 bonds and 0% July 2014 bonds will cease to exist and will be substituted by the new FCCBs on 15 July 2014, subject to the satisfaction of certain conditions precedent," Suzlon said on Thursday.

“In respect of the $175 million 5% April 2016 series, only approximately $28.8 million in principal value will remain outstanding; the remaining holders of the 5% April 2016 series have opted to substitute their existing bonds with the new FCCBs, while substitution will also be completed on the settlement date (15 July), subject to the satisfaction of certain conditions precedent," it said.

According to the statement, the issue of the new FCCBs are worth $546.91 million maturing on 16 July 2019 with a conversion price at 15.46 a share with a coupon rate of 3.25% for the first 18 months and 5.75% for the remaining 42 months.

Kirti Vagadia, group head (corporate finance) at Suzlon Group, said that Suzlon has now completed its last leg of comprehensive liability management programme that the firm had initiated in 2012.

“In the circumstances, the agreed bond restructuring package is an optimum solution for all our stakeholders," he claimed.

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