Suzlon restructuring plan gets bondholders’ nod

Published: April 7, 2020 9:47 AM

Bondholders of troubled wind energy maker Suzlon Energy have approved a restructuring plan with a 99.9% vote in a meeting held in Singapore on Monday.

The current proposal by promoters of Suzlon offers a 60% haircut to lenders in which the total debt will be split in sustainable and unsustainable portion.The approval of bondholders comes within a week of lenders approving the company’s resolution plan.

By Ankur Mishra

Bondholders of troubled wind energy maker Suzlon Energy have approved a restructuring plan with a 99.9% vote in a meeting held in Singapore on Monday, sources close to the development told FE.

The approval of bondholders comes within a week of lenders approving the company’s resolution plan, which implied around 60% haircut on a total exposure of `12,785 crore to financial creditors.
The company gave two options to the bondholders on Monday. In the first, they were given the choice of converting their outstanding loans into equity, while in the second, they were allowed to exchange their outstanding dues with new US dollar-denominated convertible bonds to be due in 2032.

As per the exchange filing on January 7, Suzlon has an exposure of `1,263 crore to foreign currency convertible bonds. The company defaulted towards payment to bondholders in July 2019.
In an email response to FE, Suzlon said, “The resolutions have been passed by a majority and now the company will be in the process of complying with the conditions precedent for restructuring the bonds, including procuring the RBI approval.”

According to sources, a few bondholders were unhappy with the deal earlier presented to them and demanded better value on their outstanding claims. However, the company was able to iron out the differences and got all bondholders on board.

The company was successful in finding a resolution with lenders last week, in which the majority portion of the company’s `12,785-crore debt will be converted into sustainable and unsustainable portions. Suzlon has promised to clear the debt in 20 years as per the resolution plan. The plan also included equity infusion of `400 crore by promoters and associates.

The Pune-based company will also divest and dispose of some of its investment and also dilute stake in some of the undertakings, in line with the approved plan. But the company did not specify which assets it would sell.

Suzlon Energy on February 12 reported widening of its consolidated net loss to `743 crore in the December quarter compared with a net loss of `40 crore in the same period a year ago.

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