Suzlon's bond sale subscribed twice over

Company went through a corporate debt restructuring process recasting Rs 9,500 cr of its debt

Suzlon Energy today raised as much as Rs 3,510 crore ($650 million) via dollar-denominated bonds. The bond sale has been subscribed by two times on the first day, according to an company official.

These bonds, guaranteed by the State Bank of India (SBI), got a positive response despite the company having defaulted on its foreign currency convertible bonds (FCCBs) in October last year. After this, the company went through corporate debt restructuring (CDR), for Rs 9,500 crore of its debt.

The five-year maturity tenure bonds were priced at six-month US treasury plus 420 basis points, said merchant bankers. According to merchant bankers, the bonds were subscribed by 75 different investors from Europe and Asia. The investors comprised foreign and Indian banks and institutional fund managers.

The pricing, to be announced tomorrow, will be in the five per cent range. This would be the interest offered to the subscribers of the bonds.

The money raised will be used to pay lenders, as part of its CDR. As much as Rs 1,620 crore ($300 million) raised will be used to pay lenders before the end of the current financial year.

During the two-year moratorium, interest of Rs 1,500 crore will be converted into equity, beginning next month, and by September 2104, banks will hold over 32 per cent in the company, according to the CDR.

The stock of Suzlon traded flat in today's trade as it went up by 0.7 per cent to close at Rs 13.4 per share, as per data available on the Bombay Stock Exchange.