Suzlon agrees debt restructuring

Indian wind group Suzlon says it has agreed with its lenders a $1.8bn package to restructure its domestic debts, in a step it claims will help “normalise” its business.

Suzlon has been negotiating for several months with its key lenders under India’s CDR (corporate debt restructuring) mechanism.

Today the company said it has formally agreed a CDR package with a consortium of 19 banks.

The deal includes a two-year moratorium on principal and term-debt interest payments, a 3% reduction in interest rates and a six-month moratorium on working capital interest.

Suzlon adds: “As part of the package $ 270m (two year’s interest payment during moratorium) will be converted into equity /equity-linked instrument over the next two years to bring stronger financial stability."

The deal also includes what it describes as “a 10-year door-to-door back-ended repayment plan”.

Suzlon’s backers will also inject $50m of equity into the company over an agreed timeframe.

Kirti Vagadia, Chief Financial Officer says: “This is a major step forward in our efforts to achieve a sustainable capital structure.

“The terms of the package include enhanced working capital facilities, a reduction of interest rates of nearly 3%, and conversion of interest costs into equity." Vagadia says they are "key enablers towards normalising our business.

“I am confident that by this CDR package, we will quickly return to a position of stability and confidence for our customers, vendors and employees.”

Suzlon is still negotiating with bondholders over $221m of foreign currency convertible bond (FCCB) payments.

Vagadia says: “We continue to be in constructive dialogue with majority of our bondholders across all the four series, and this development will help provide further visibility towards finding a consensual solution.”