Suzlon Energy plans to raise about Rs 3,000 crore to refinance debt

Wind energy equipment maker Suzlon Energy (SEL) is planning to raise about Rs 3,000 crore through long-term credit to refinance its existing term loans and non-fund-based limits.

The company is looking at refinancing in order to streamline the lenders, avail better terms from restrictions on cash usage, and bolster growth of the business.

The cash flows are ring-fenced, and the existing or proposed debt is being restructured or sanctioned for the entities under Suzlon The Group  (STG) — comprising SEL and its four subsidiaries. The overall rated limits, including term loans and non-fund-based limits, would remain equal or lower than Rs 4,467 crore.

India Ratings has assigned a long-term issuer rating of ‘IND BBB-’ to the proposed loans and non-fund based limits. The ratings factors in SEL and its four subsidiaries — Suzlon Power Infrastructure, Suzlon Gujarat Wind Park, Suzlon Global Services, and Suzlon Generators — due to the operational and strategic linkages between the companies. The entities have been jointly referred to as STG. The Suzlon Generators was divested from STG on April 7 as part of a monetisation exercise.

SEL’s consolidated financial profile is underpinned by the steady and predictable income from around 13.1 gigawatt of capacity under the operations and maintenance services portfolio. This has been generating an Ebitda of around Rs 700 crore annually.

Under the restructuring carried out in June 2020, the funded debt was reduced to Rs 3.870 crore from Rs 12,400 crore. The unsustainable debt was converted to optionally convertible debentures (OCDs) of Rs 4,100 crore, and compulsory convertible preference shares of Rs 4,450 crore.