The lenders to debt-ridden wind turbine manufacturer Suzlon Energy will meet on Friday to discuss its corporate debt restructuring (CDR) package.
Though Suzlon’s R11,000-crore debt has been admitted into the CDR cell, the company’s recast package has not yet been approved by the lenders.
Over the last few weeks the monitoring committee or the largest lenders to Suzlon, including State Bank of India and IDBI Bank, have been meeting to thrash out the finer details of the package. This will now be presented to the rest of the consortium on Friday.
For approval by the consortium, the CDR package would require a mandate from atleast 75% of the lenders by value and 60% of the lenders by amount.
The main lenders to Suzlon are SBI with an exposure of around R3,500 crore, IDBI Bank with around R1,700 crore exposure, Bank of Baroda at R1,000 crore and Indian Overseas Bank at R1,000 crore. Some of the other lenders to the group with smaller exposures include ICICI Bank, Axis Bank, Dena Bank, and Yes Bank.
According to Suzlon’s flash report that contains the initial proposals for the CDR package, the company’s promoter Tulsi Tanti is expected to bring in R250 crore. Apart from a two year loan moratorium, the package will also include term loans and working capital loans. The flash report also proposes rolling over $475 million in FCCBs.
Suzlon also plans to sell off some of its assets, including Suzlon Tianjin, SE Forge and SE Electricals, to raise money.
The world’s fifth largest wind turbine maker, which in October defaulted on the redemption of its $221 million foreign currency convertible bonds (FCCBs), had a fully secured gross debt of R14,568 crore on its book as of the July-September quarter, taking its debt to four times the equity.
Concerns over turbine quality and a global slowdown in sales have hit Suzlon hard in recent times, resulting in mounting losses and debt.
For the financial year 2011-12, the company reported a net loss of R479 crore on revenue of R21,082 crore. The company posted revenues to the tune of R659.27 crore in the July-September 2012 quarter and posted a net loss of R546.33 crore.
