Suzlon stocks jump 17% on CDR approval

Company's domestic lenders approved company's CDR package of Rs 9,500 crore

Shares of Suzlon Energy zoomed a whopping 17% on Friday after the empowered group of corporate debt restructuring (CDR) cell approved its proposal for domestic debt restructuring.

On the Bombay Stock Exchange, company's stocks closed at Rs 21.10 after hitting an intra-day high of Rs 21.30. The counter was among the top four gainers in today's trade.

The company's domestic lenders, a consortium of 19 banks, approved the company's CDR package of Rs 9,500 crore ($ 1.8 billion).

In a statement to the stock exchanges, the company said, "The package includes a two year moratorium on principal and term-debt interest payments; a three% reduction in interest rates; six month moratorium on working capital interest; as part of the package Rs1,500 crore will be converted into equity or equity-linked instrument over the next two years to bring stronger financial stability and a 10 year door-to-door back-ended repayment plan."

The group's promoters will also bring in equity to the extent of Rs 250 crore into the company in stipulated time, of which Rs 62 crore has already been infused.

Stocks of Suzlon, which have long been reeling under pressure, tasted a 52-week low of Rs 14.75. In the previous financial year 2011-12, the company posted a net loss of Rs 505 crore. However, situation only worsened in FY13 as the first two quarters of the year (April-September) witnessed company posting a loss of close to 1,150 crore.

Kirti Vagadia, chief financial officer of Suzlon Group, said that by this CDR package, the company will return to a position of stability and confidence to its customers, vendors and employees.

Suzlon group is world's fifth largest wind turbine supplier. Head-quartered in Pune, Suzlon has its operations in 32 countries with installations of over 20,000 MW.