Suzlon board okays debt rejig plan to convert loans to equity

Mumbai: Beleaguered-Suzlon Energy’s board has accredited a debt restructuring plan that can entail problems with shares, different devices and divestment of property, the corporate knowledgeable the bourses late Thursday.
The wind turbine maker additionally handed an enabling decision for conversion of mortgage and debentures into equity. It didn’t disclose the quantum of the debt that may be transformed.

“The board has approved the company’s proposal for restructuring of debt of the company and its certain identified subsidiaries formulated under the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 issued by Reserve Bank of India vide its circular dated 7th June 2019,” the corporate stated within the assertion.

The firm will difficulty to its lenders up to 100 crore equity shares, up to 410,000 0.01% secured optionally convertible debentures of Rs 100,000 every, and up to 50 crore warrants of Rs 1 every.

Separately, the board additionally accredited an enabling decision to difficulty shares or equity linked devices Rs 1,000 crores, which can be raised later if required.

Suzlon Energy stated it has additionally acquired approval on the market of property.

Suzlon may also difficulty equity or obligatory convertible debentures of the corporate on preferential foundation to the promoters and another entities price Rs 400 crore.

Last yr, Suzlon defaulted on mortgage repayments and its loans have been categorised as non-performing property by lenders. In July 2019, Suzlon’s secured collectors signed an inter-creditor settlement to resolve the debt disaster by working with the corporate. According to a central financial institution directive on June 7, such agreements have to be signed inside 30 days of the primary default to any lender. Banks have a 180-day window, which ended on January 6 to resolve the difficulty.

This was the second occasion of a significant default within the 24-year lifetime of the Indian wind turbine maker. In 2012, it had defaulted on FCCB reimbursement, the most important of its variety on the time. The bonds it defaulted on in July have been, actually, issued in alternate for one of many sequence on which it had defaulted at the moment.

In 2013, Suzlon underwent a company debt restructuring for its Rs 9,500 crore loans because it confronted extreme liquidity crunch and couldn’t service debt. In 2015, billionaire Dilip Shanghvi got here in as a white knight, shopping for a 23% stake. But the corporate’s issues continued because the Indian authorities rolled again incentives to the wind energy sector, the market shrank and competitors intensified whilst debt remained excessive.

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