Suzlon agrees $485m bonds deal

Indian wind group Suzlon has reached a deal to restructure $485m worth of bonds after 18 months of negotiations.

The company said it has concluded talks with a committee representing its bondholders and an agreement has been reached to issue new five-year bonds.

The new bonds will have a conversion price of 15.46 rupees. Their yield will be about 5%, said a statement from Suzlon.

The arrangement – which is subject to formal approval by bondholders and India’s financial authority – would end a process that began in October 2012, when Suzlon was unable to settle a chunk of foreign currency convertible bonds worth $221m.

The issue has loomed over Suzlon’s finances ever since as the turbine-maker attempted to get back on a sound footing amid a downturn in its Indian domestic market.

The company and the bondholders’ committee reached a “standstill agreement” lasting until 15 August to carry out the restructuring.

Suzlon finance chief Kirti Vagadia said: “The proposed cashless restructuring package for our existing bonds is an optimal solution to our last remaining piece under the comprehensive liability management programme and is value accretive for all our stakeholders.

“The Suzlon Group remains thankful to the secured lenders and bondholders for their patience and constructive approach in arriving at a solution.”

Shares in Suzlon – which also owns German turbine-maker REpower Systems – were trading more than 6% higher in Mumbai this afternoon.