INSUBCONTINENT EXCLUSIVE:
Mumbai: Lenders to the debt-laden Suzlon Energy have agreed to a restructuring plan that allows the company to convert ₹8,200-crore of
loans to long-term optionally converted debentures and preference shares
Lenders have also asked the promoters of the company, led by Tulsi Tanti, to infuse ₹375 crore into the company as equity immediately to
activate the restructuring plan, which has been under discussion for the last one year, people familiar with the plan said.
The
restructuring plan was finalised at a meeting of lenders on Monday and is to be implemented after the boards of each of the banks ratify it
The company owes banks led by State Bank of India (SBI) a total of ₹11,800 crore and has been facing issues with regards to repayments
over the last one year.
The plan agreed by banks identifies ₹3,600 crore of loans as sustainable on which the company will pay 9% interest
The remaining ₹8,200 crore is to be converted into optionally convertible debentures (OCDs) and compulsorily convertible non cumulative
preference shares (CCPS) in two equal parts.
“The OCDs and the CCPS are payable over the next 20 years at a coupon rate of 0.01%
The promoters have to bring in ₹375 crore capital at the earliest
SBI being the lead lender has driven the whole process and since all banks have signed an inter creditor agreement (ICA) in this case, we
expect it to go through,” said one of the persons familiar with the plan
SBI is the lead lender with dues of ₹4,300 crore, followed by IDBI Bank with ₹1,670 crore and Bank of Baroda with ₹1,458 crore
SBI was driving the restructuring process while other lenders are part of the overseeing committee which has to approve the plan.
Suzlon had
to look at debt restructuring after talks with potential buyers fell through last year
It is rated D or default category by Care Ratings
The company’s chairman Tulsi Tanti has blamed the ₹16,000-18,000 crore payments due from states as the reason for the company’s weak
finances.
In the quarter ended December 2019, the company’s net loss widened to ₹1,045.7 crore from ₹284.8 crore a year ago as sales
plunged 83% to ₹67.9 crore from ₹397.4 crore
The Tanti family owns 19.82% stake in the company out of which 76.34% shares are pledged.
The company’s board is slated to meet on
Thursday, to consider approving a proposal to raise equity through a preferential issue, private placement or any other method permissible,
Suzlon said in a stock market notice on Monday.
