Main lenders to debt-ridden Suzlon Energy could include its German subsidiary REpower in the corporate debt restructuring (CDR) package that is currently being worked out by the bankers. Representatives from the main lenders, including the State Bank of India (SBI) and IDBI Bank, will discuss the issue on Saturday, a source said.
Some bankers say the CDR package could make provisions to acquire loans made to REpower by its German lenders. This would enable Suzlon to access cash held by REpower. As per the terms of the 750-million-euro (over R5,000 crore) loan made to REpower this year, Suzlon cannot draw into cash reserves or credit available to REpower. REpower recorded around 1.16 billion euros of sales in the first half of this financial year.
The source, however, said that there are some differences between banks over acquiring REpower?s German loans, which the meeting would look to address.
Bankers say that REpower has a strong cashflow and order book combined with relatively low debt levels in its books. The euro-denominated loan to REpower was made in March this year by a group of banks and credit institutions, including Commerzbank and Deutsche Bank. The loan comprises a 725-million-euro letter of guarantee and a 25-million-euro credit facility.
Suzlon?s debts to the tune of R11,000 crore have already been admitted into the CDR cell. The bankers are now meeting to finalise the finer details of the CDR package. The main lenders to Suzlon are SBI with an exposure of around R3,500 crore, IDBI Bank with around R1,700 crore, Bank of Baroda at R1,000 crore and Indian Overseas Bank at R1,000 crore.
According to Suzlon?s flash report, which contains the initial proposals for the CDR package, the company?s promoter Tulsi Tanti is expected to bring in R250 crore. Apart from giving a two-year loan moratorium to Suzlon, the package will also include term and working capital loans. The flash report also states that the company should seek to roll over the foreign currency convertible bonds (FCCBs) to the tune of $475 million. Suzlon also plans to sell off some of its assets held in other entities, including Suzlon Tianjin, SE Forge and SE Electricals.
Suzlon has been under pressure due to a slowdown in global turbine sales and growing debt. For the financial year 2011-12, the company posted revenues worth R21,082 crore with a net loss of R479 crore. As of September 30, Suzlon reported debt to the tune of around R13,200 crore, of which FCCBs contributed around R3,500 crore. The company posted revenues to the tune of R659.27 crore in the July-September quarter this fiscal and posted a net loss of R546.33 crore.