BackSuzlon sells bonds worth $650 million
The company will use the amount to refinance the existing debt
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Mumbai: Wind turbine maker Suzlon Energy Ltd has sold $650 million (around ₹ 3,575 crore) worth of bonds backed by lenders, including State Bank of India, to refinance its existing debt, according to three people close to the development.
AE-Rotor Holding BV, a unit of Suzlon Energy, has closed the bond issue on Monday. The sale was arranged by JPMorgan Chase and Co. and SBI Capital Markets Ltd.
“These bonds are five-year fixed rate senior unsecured bonds backed by unconditional and irrevocable stand by letter of credit from SBI," one of the people said. All three declined to be named.
Details of investors are not known.
On Monday, the shares of Suzlon Energy closed at ₹ 13.45 on BSE, up 0.75%, while India’s benchmark Sensex index fell 0.29% to 18,681.42 points.
“The company will use this amount to refinance the existing dollar debt. Though the existing international dollar loans are not bearing high interest costs, the current bond issuance will help to improve the cash flows as the company can enjoy the single bullet repayment instead of multiple instalments," a second person said. He added that this bond sale was according to the norms of corporate debt restructuring (CDR) approved by lenders.
Rohit Chatterji, head of investment and corporate banking at JP Morgan, said the bond issue was successfully subscribed by a wide variety of investors across Asia and Europe. He did not divulge details.
Suzlon Energy executive declined to comment.
On 24 January, Suzlon won approval for a ₹ 9,500 crore CDR from its domestic lenders. The lenders, a consortium of 19 banks, agreed to enhance working capital facilities to the group by ₹ 1,800 crore and a 10-year back-ended repayment plan as part of the exercise.
Creditors of Suzlon Energy will hold a stake of at least 32.1% in the company once they convert interest payable on their loans for two years into equity under the CDR exercise.
After the CDR, IDBI Bank Ltd will hold 7.54% of Suzlon, State Bank of India 4.46% and Life Insurance Corp. of India 3.47%, according to a document filed by the company with the stock exchanges.
A total 21 organizations, including commercial banks, co-operative banks and financial institutions, will share the 32.1% stake. In return, Suzlon will get a moratorium on loan repayments as per the CDR process.
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