Suzlon Energy hits the roof on debt restructuring

Shares of the wind-turbine maker hit an upper circuit of 5% at Rs 5.36 after the debt-laden firm announced the completion of its debt restructuring.

Shares of Suzlon Energy have jumped 21% in four trading sessions.

The wind-turbine maker completed its debt restructuring with unanimous approval of secured lenders. The term debt has reduced substantially with interest of 9% per anum repayable over 10 years starting 1 July 2020. Balance debt of secured consortium lenders is replaced by 0.01% optionally convertible debenture (OCD) of the company and 0.0001% compulsorily convertible preference shares (CCPS) of its subsidiary redeemable or convertible in 20 years, the company announced during trading hours today (1 July).

Commenting on the restructuring, Tulsi Tanti, Founder and CMD, Suzlon Group said Consortium of lenders led by State Bank of India and the company have worked together to protect the interests of all the stakeholders involved, thereby protecting the Indian Wind Energy sector, saving thousands of direct and indirect jobs."

J P Chalasani, Group CEO, said, We are pleased to have implemented our Debt Restructuring with unanimous approval from the consortium lenders and 99.9% of our FCCB holders. Capital infusion of Rs 392 crore by promoters, key shareholder and various stakeholders demonstrates their commitment and confidence in Suzlon."

Swapnil Jain, CFO, said, "This Debt Restructuring will ease the pressure on our cash flows significantly and give us headroom for ramping up business operations. We have reduced our fixed cost steeply and brought down the interest costs by more than 70%. This has resulted in substantial reduction in the break-even point from pre-restructuring levels ensuring a long term sustainable business case. It improves our overall competitiveness in the market place and now Suzlon is back to business from a position of strength."

On a consolidated basis, Suzlon Energy posted a net loss of Rs 743.03 crore in Q3 December 2019 as against a net loss of Rs 38.62 crore reported in Q3 December 2018. Net sales for Q3 December 2019 stood at Rs 653.57 crore, tumbling 40% from Rs 1090.68 crore in Q3 December 2018.

Suzlon Energy is a producer of wind turbines. It offers a range of solar energy solutions, such as solar irradiance assessment, land acquisition and approvals, infrastructure and power evacuation and life cycle asset management.

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