The SBI-led consortium of 20 lenders has agreed to recast Rs 11,000 crore loan of the struggling Suzlon Energy under the corporate debt restructuring (CDR) mechanism, a top company official has said.
The world's fifth largest wind turbine maker, which had last month defaulted on the redemption of its USD 221 million foreign currency convertible bonds (FCCBs), had a fully secured gross debt of Rs 14,568 crore on its book as of the July-September quarter, taking its debt to 4 times the equity.
At the end of the quarter, its net debt stood at Rs 13,604 crore and a cash balance of Rs 964 crore, according to the balance sheet statement.
"The lenders led by SBI have agreed to consider our Rs 11,000-crore CDR proposal and we hope to conclude the deal in the next few months," a top Suzlon official said on the condition of anonymity.
SBI could not be reached for comments, nor SBI Caps which is drafting the CDR plan.
Most of the 20 lenders to the debt-laden Pune-based company are state-run banks and SBI has an exposure of around Rs 3,500 crore.
The other lenders include IDBI Bank, Bank of Baroda, Axis Bank, Punjab National Bank, Indian Overseas Bank, Central Bank of India, Yes Bank, and State Bank of Bikaner & Jaipur among others.
Last month, the SBI had suggested merger of Suzlon's profitable German subsidiary REpower with the group to improve profitability and deleverage its balance sheet.
The Tulsi Tanti-promoted company had sought the debt restructuring process late last month.
The official did not share more details such as the new interest rate on the recast loan, the capital infusion that the promoters have to chip in for the deal, saying that those details will be decided at the next meeting scheduled for next month. Market lapped up the news and shares of the company, which is squeezed by high cost debt and tight working capital, soard 10 per cent to Rs 17.05 on the BSE, whose main gauge Sensex jumped 305 points.
Still, the stocks are trading nearly half the year-high level in February. That too was as much as 96 per cent below the Rs 459.8 peak in early 2008, when the global wind energy sector was booming.
The rupee debt, which is due in 5-6 years, will be recast with a two-year moratorium on interest and principal repayment, after which the loans will be repaid over eight years at a lower rate, the