The lenders have signed an inter-creditor agreement and have time till January 2020 to implement a resolution plan.
Troubled wind turbine maker Suzlon Energy may head to National Company Law Tribunal (NCLT) as lenders see no possibility of resolution, two people familiar with the matter told FE.
“There were two investors who showed interest in Suzlon, but both of them have backtracked. We have no option but to refer this account to NCLT”, a source added.
The two investors are said to be Canada-based Brookfield and Denmark-based Vestas Wind Systems. The banks were in process of finding a resolution of the debt-laden wind energy maker after signing inter-creditor agreement (ICA) in July. Since no resolution have been found till now, banks have to decide on referring Suzlon to NCLT by January 7, 2020. This is on account of the 180-day deadline, following the Reserve Bank of India’s June 7 circular that mandated banks to resolve cases within such a time-frame. Post the 180-day deadline, banks need to make additional provisioning of 20%, in the cases where resolution is not implemented.
In an exchange filing on November 20, the company said “Suzlon is continuously working on a resolution plan with the lenders and has also submitted a restructuring plan, which envisages segregating total debt into sustainable debt and unsustainable debt”.
In an emailed response to FE, Suzlon said: “The sector is witnessing issues on project execution, policy uncertainty, unavailability of land and transmission infrastructure. The auction held by Solar Energy Corporation of India (SECI) for 1,200 MW last week received bids from two players for just 266 MW and postponed to next month.
The company submitted a restructuring plan in October 2019 to the lenders’ consortium and is actively engaging with them on the same. The restructuring plan is currently being reviewed by the lenders’ consortium for implementation. “The lenders have signed an inter-creditor agreement (ICA) and have time till January 2020 to implement a resolution plan. Considering the above, you may also ascertain that the lenders are not taking the company to NCLT.” the company added.
The Tulsi Tanti-led company’s loss widened to Rs 777.52 crore in the quarter ended September 30, 2019, in comparison with a net loss of Rs 625.76 crore in the corresponding quarter last fiscal. Its revenue from operations fell to `803.09 crore during the quarter under review as against Rs 1,194.99 crore in the year-ago period. Suzlon had defaulted on loans, bonds and interest payments of a combined Rs 2,979 crore as of September 30. The independent auditor Deloitte Haskins & Sell LLP said, “The existing material uncertainty casts significant doubt about Suzlon’s ability to continue as a going concern. All will depend on the successful outcome of its restructuring plan and settlement with other lenders”. The company had net term debt of Rs 7,751 crore as on June-end, which included a foreign currency convertible debt at the time of signing of ICA. State Bank of India is the lead creditor to Suzlon Energy.