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Suzlon starts debt-restructure talks, suspends guidance
Indian-owned wind turbine giant Suzlon has started discussions with a key group of lenders with the aim of restructuring its debt.
The proposal under discussion with the company’s senior secured lenders foresees a maturity period of ten years under India’s CDR (corporate debt restructuring) mechanism, including a two-year moratorium on principal and interest payments on term-debt, Suzlon says.
The company has also suspended its previously-given guidance for the current financial year, becasue “liquidity constraints over the first half of the fiscal [year], a volatile market environment and the time-line of the CDR process will continue to impact performance".
Suzlon’s chief financial officer Kirti Vagadia says: “The company has, in consultation with its senior secured lenders, taken the decision to undertake a debt restructuring exercise under the CDR mechanism.
“Our senior secured lenders are supportive of our long-term business plans, and our efforts to consolidate our overall debt to achieve a sustainable capital structure.”
Vagadia claims that the move will constitute “an important step towards stabilising our business by enhancing liquidity and injecting additional working capital".
Meanwhile, Suzlon says it continues to talk to holders of the company’s foreign currency convertible bonds (FCCBs), which earlier this month rejected a request by Suzlon for a four-month extension on redemption of $221m.
It expects that “an acceptable solution for all stakeholders will be reached at the earliest possible date".
Despite suspending the current guidance, Suzlon says it is confident of the company’s performance over the mid-term, “and of returning the business to a position of strength".