Loss making wind turbine maker Suzlon Energy has finally completed its debt restructuring. The company has met all the stiff conditions put forth by its lenders. After the restructuring, the company’s term debt has been lowered and the interest rate reduced. The balance debt of secured consortium lenders has been replaced by optionally convertible debenture of the company and compulsorily convertible preference shares of its subsidiary. The debt restructuring is likely to help in cash flow and give the Tantis some headroom to ramp up the business.
Suzlon Energy Limited (‘SEL’ or ‘the Company’) listed company is primarily engaged in the business of manufacturing of wind turbine generators (‘WTGs’) and related components of various capacities.
With a view towards resolution of the indebtedness of the Borrowers, the Lenders had entered into an inter-creditor agreement dated July 1, 2019 (“ICA”). Pursuant to the ICA, the lenders have unanimously approved a resolution plan in terms of which the existing facilities are to be restructured. On March 27, 2020, the Resolution Plan was approved by 100% of the consortium lenders subject to certain conditions precedent.
On 5th June 2020, Borrowers have entered into the Framework Restructuring Agreement (FRA) to give effect to the resolution plan. On June 30, 2020, the Resolution Plan was implemented upon completion of compliance of all condition’s precedent to the satisfaction of the consortium lenders and Resolution Plan is effective from June 30, 2020.
The key features of the Resolution Plan:
The existing loan facilities of STG (Suzlon The Group) are restructured in the following manner and divided into 3 parts:
Part A – Part of Existing facilities other than FCCB to the extent of ₹ 5,188.41 Crore is restructured as follows:
- Repayment of Rupee Term Loan (‘RTL’) of ₹3,600 Crore in 40 structured quarterly installments commencing from September 2020 to June 2031 at the rate of interest of 9.00% per annum.
- Repayment of Rupee Term Loan under the project-specific facility of ₹261 Crore on or before December 31, 2020.
- Continuation of existing non-fund based working capital facilities of INR 1,300 Crore.
Part B – Balance Existing facilities to the extent of INR 4,100 Crore is converted into 410,000 nos. 0.01% Secured Optionally Convertible Debentures (‘OCD’) of face value of INR 100,000 each of Company issued to Lenders.
Terms of OCD:
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