Mumbai, Jan. 24: Suzlon Energy's lenders have agreed to restructure the wind turbine maker's massive debt of around Rs 9,500 crore ($1.8 billion).
Under the corporate debt restructuring (CDR) plan, which will come into effect from October, Suzlon will get a two-year moratorium on the principal and term-debt interest payments, a three per cent reduction in interest rates and a six-month moratorium on working capital interest. Suzlon was servicing its loans at around 14 per cent interest rate.
Further, a sum of Rs 1,500 crore ($270 million) will be converted into equity/equity-linked instrument over the next two years.
"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 three per cent and conversion of interest costs into equity. These are key enablers towards normalising our business. By this CDR package, we will quickly return to a position of stability," Kirti Vagadia, chief financial officer of Suzlon Group, said.
The company said the package included the enhancement of working capital loans of around Rs 1,800 crore, which will allow the company to execute its order book.
As part of the recast, the promoters will infuse equity of Rs 250 crore within a stipulated time frame, of which Rs 62 crore has already been brought in.
Suzlon Energy did not provide details on this, and company officials were unavailable for comments.
Vagadia added Suzlon was in talks with a majority of its bondholders, who had last October refused to extend the deadline for redemption of two tranches of foreign currency convertible bonds aggregating to $220.8 million (Rs 1,172 crore).
While the announcement came towards the close of market hours, the Suzlon share finished lower by over 3 per cent at Rs 18 on the National Stock Exchange.