Suzlon Energy on Friday said it had sought up to 45 days more for the repayment of foreign currency convertible bonds (FCCB), due on June 17.
The total repayment, including interest, is around $359 million (Rs 1,967 crore). This is for the FCCBs raised in 2008, with an issue size of $300 million (Rs 1,664 crore).
The company said it was in advanced stages of raising up to $300 million from new facilities for refinancing its FCCB obligations. The repayment is a huge concern for shareholders, who fear the company could default. “To ensure that there is adequate time for the necessary requisite approvals and administrative documentation, we have asked our bondholders for an extension,” said Kirti Vagadia, chief financial officer of Suzlon group.
While it is yet to be known if bondholders will agree to extend the deadline, the company said it was engaging with them. “A very significant portion of bondholders is supportive,” Vikas Rathee, head of corporate finance of Suzlon Energy, told Business Standard.
Rathee said the company had been working on the plan to repay FCCBs since September last year. The company’s stock went up one per cent in on Friday’s trade to close at Rs 20 per share. Last month, Suzlon sold stake in its wind farm for Rs 200 crore to fulfil its FCCB obligation.
Suzlon is raising the loan to repay FCCBs in foreign currencies. This loan has been secured from the international subsidiaries of the current 18 lenders to Suzlon. Most of the banks in the consortium are Indian banks.
“With this $300 million, the interest cost will reduce slightly. But in the next 12 months, we plan to convert a major part of the loans into foreign debt, and significantly reduce interest costs,” said Rathee.