Suzlon Set to Restructure its Bonds

The company had issued bonds for $546.91 million

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Suzlon Energy Limited, a publically listed renewable company that has been under financial stress over the past year, has received approval to restructure its bonds.

According to the company’s filing at the Singapore Exchange Securities Trading Limited, the implementation of the restructuring of the bonds and the amended conditions will be based on the satisfaction of certain conditions of the company on or before September 2020.

These conditions precedent include, among others, the receipt of the company for approval from the Reserve Bank of India (RBI). According to the company’s filing at the Singapore Exchange Securities Trading Limited, the total size of the bond issue was $546.91 million (~₹41.595 billion).

In March 2020, Mercom reported that Suzlon’s board of directors had put in place a plan for restructuring its debt.

The company had made announcements through notices and Consent Solicitation and Information Memorandum (CSIM) to ask for the existing bondholders’ approval of an extraordinary resolution (bondholders’ resolution) for the implementation of certain amendments to the trust deed and the terms and conditions of the existing bonds. The company had given two options.

Under option A, the company had offered a mandatory conversion of each $1,000 (~₹75,581) in principal amount of the outstanding existing bonds into a fully paid-up equity shares of the company at face value of ₹2 (~$0.03).

The company’s option B was the substitution of each $1,000 (~₹75,581) in principal amount of the outstanding existing bonds along with any “accrued but unpaid interest, with the new dollar-denominated convertible bonds due 2032 with a face value of $320 (~₹24,185.92) to be used by the company.” The company had also given the option to waive all the existing defaults that have occurred or that may occur.

Earlier, it was reported that Suzlon disclosed an outstanding debt of ₹127.85 billion (~$1.8 billion), according to the company’s Bombay Stock Exchange (BSE) filing. The company had filed the disclosure of defaults on payment of interest, repayment of principal amount on loans from banks and financial institutions in the filing.

The revenue of the company for Q1 FY20 came to ₹8.33 billion (~$117 million). According to the company’s statement, it continued to witness a sectoral slowdown, owing to the prolonged industry transition to reverse auctions and policy uncertainty in a few states.

In April 2019, Suzlon had announced that it would sell two of its solar subsidiaries to Ostro Energy, a wholly-owned subsidiary of independent power producer, ReNew Power. The two subsidiaries are Shreyas Solarfarms Limited (Shreyas solar) and Aalok solar farms Limited (Aalok Solar).

 

Image credit: Jessicakemper2 / CC BY-SA

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