Suzlon concludes debt restructuring, shares surge

Suzlon closed at Rs 5.36, higher by 4.89% from its previous close.

By Ankur Mishra

Suzlon Energy on Wednesday announced the completion of its debt restructuring with unanimous approval of secured lenders.

The committee of creditors (CoC) had already approved the resolution plan given by the promoters in March this year, which implied an around 60% haircut for financial creditors on the total debt of Rs 12,785 crore.

The plan, however, could not be implemented due to several delays owing to the Covid-19 outbreak. Thereafter, the deadline for implementation of the plan was revised till June 30. After the announcement, shares of the company hit the 5% upper circuit on the BSE. Suzlon closed at Rs 5.36, higher by 4.89% from its previous close.

Under the approved resolution plan, a large portion of Suzlon’s Rs 12,785-crore debt was to be converted into sustainable and unsustainable debt. According to sources, Suzlon Energy agreed to repay the sustainable debt of Rs 3,600 crore in the first 10 years. The remaining portion of the debt was proposed to be paid over 20 years by converting it into optionally convertible debentures (OCDs) and compulsorily convertible preference shares (CCPS).

In a release issued to the stock exchanges, the renewable energy provider said: “The term debt reduced substantially with interest of 9% per annum repayable over 10 years starting July 1, 2020.”

The balance debt of secured consortium lenders replaced by 0.01% OCD of the company and 0.0001% CCPS of its subsidiary redeemable or convertible in 20 years, the release further said.

The promoters of the company, led by Tulsi Tanti, had agreed to infuse `392 crore into the company, as per the resolution plan. Group CEO JP Chalasani said capital infusion of Rs 392 crore by promoters, key shareholders and various stakeholders demonstrates their commitment and confidence in Suzlon.

Suzlon Group founder and CMD Tulsi Tanti said: “This initiative takes us a step forward to stay Aatmanirbhar in manufacturing of wind turbines and its components, making India the supply chain hub for the global wind sector.”

FE had earlier reported that the resolution plan for Suzlon would be implemented by June 30 as lenders and promoters had been able to resolve their differences on the deal structure. The point of difference between the lenders and the company was payment of interest accrued between March 31 and June 30. The lenders later agreed to a proposal given by Suzlon promoters to convert interest accrued between March 31 and June 30 amounting to Rs 300 crore into CCPS.

The lenders of Suzlon had entered into an inter-creditor agreement on July 7, 2019, to find a resolution for the company.