February 21 (Renewables Now) - The State Bank of India (SBI) has given its nod to Suzlon Energy Ltd’s (BOM:532667) plan to restructure INR 127 billion (USD 1.76bn/EUR 1.63bn) in debt, Livemint reports, quoting unnamed bankers familiar with the proceedings.
The troubled wind turbine maker will be able to convert its debt into sustainable and unsustainable debt under the plan that calls for lenders to take a 65% haircut. The sustainable debt will represent around 32%-35% of the total and will be repaid in 10 years, while the overall amount will be repaid in over 20 years. The unsustainable debt will include non-convertible debentures and compulsorily convertible preference shares (CCPs).
According to the report, SBI will get a 10% stake in Suzlon, as well as a 49% interest in its subsidiary Suzlon Global Services Ltd after the conversion of the CCPs in 20 years.
One of the bankers has told the newspaper that Tulsi Tanti, Suzlon’s promoter, has pledged to bring in equity worth INR 2.75 billion and is looking to get working capital loans from other lenders. The sale of some of the company’s assets is also being considered, the source has said.
An inter-creditor agreement was signed by the company's secured creditors in July 2019 that calls for finding a solution to Suzlon’s debt crisis. The manufacturer’s debt restructuring plan has to be approved by at least 66% of the lenders in its lending consortium.
Suzlon's net debt stood at INR 129.06 billion at the end of December 2019.
(INR 10 = USD 0.139/EUR 0.129)