Suzlon Group has announced the formal approval of its proposal for therestructuring of its domestic debt by the Empowered Group of Corporate Debt Restructuring(CDR) Cell.
The company’s domestic lenders, a consortium of 19 banks, approved the company’s CDR package of ~Rs 9,500 cr / US$ 1.8 bn.
The package includes a two year moratorium on principal and term-debt interest payments; a three per cent reduction in interest rates; six month moratorium on working capital interest; as part of the package Rs 1,500 cr / US$ 270 mn (two year’s interest payment during moratorium) will be converted into equity / 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 package also includes an enhancement of working capital facilities, by approximately Rs 1,800 cr / US$ 350 mn, allowing the company to accelerate the execution of its strong orderbook. The Group’s Promoters will also bring in equity to the extent of Rs 250 cr / US$ 50 mn into the Company in stipulated time frame, of which Rs 62 cr has already been infused.
Speaking on the development, Mr Kirti Vagadia, Chief Financial Officer – Suzlon Group said: “This approval clearly underscores the fundamental viability of our business. “This is a major step forward in our efforts to achieve a sustainable capital structure. The terms of the package include enhanced working capital facilities, a reduction of interest rates of nearly three per cent, and conversion of interest costs into equity, are key enablers towards normalizing our business. I am confident that by this CDR package, we will quickly return to a position of stability and confidence for our customers, vendors and employees.
“Additionally, we continue to be in constructive dialogue with majority of our Bond holders across all the four series, and this development will help provide further visibility towards finding a consensual solution at the earliest.”
The Group’s long-term strategic plan of realising deep synergies from its REpower remains unchanged.
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News published on 25 / 01 / 2013 by Bharat Vasandani