Suzlon Group Completes Debt Restructuring with Unanimous Approval from Secured Lenders

Strategic Insights -

The Suzlon Group, a leading wind turbine manufacturer, has successfully completed its debt restructuring process with the unanimous approval of secured lenders. As part of the restructuring, the company has reduced its Term Debt substantially, with an interest rate of 9% per annum, repayable over 10 years starting July 1, 2020. The balance debt of secured consortium lenders has been replaced by a 0.01% Optionally Convertible Debenture (OCD) of the Company and a 0.0001% Compulsorily Convertible Preference Shares (CCPS) of its subsidiary, redeemable or convertible within 20 years.

Key Takeaways:

  • The debt restructuring was approved unanimously by the consortium of lenders led by State Bank of India, ensuring the protection of interests of all stakeholders involved.
  • The initiative has saved thousands of direct and indirect jobs, ensured the survival of numerous MSME vendors, and protected approximately 13 GW of operating wind energy assets in India.
  • The debt restructuring takes a significant step forward in making India self-sufficient in wind turbine manufacturing, with the aim of establishing the country as a supply chain hub for the global wind sector.
  • Promoters, key shareholders, and various stakeholders have infused a capital of Rs. 392 crores, demonstrating their commitment and confidence in the company during challenging times.
  • The restructuring has resulted in a significant reduction in the break-even point, from pre-restructuring levels, ensuring a long-term sustainable business case.
  • The company has reduced its fixed costs steeply and brought down interest costs by more than 70%.
  • The debt restructuring has improved the company's overall competitiveness in the market, enabling it to focus on capturing the growth potential in the Indian Wind Energy sector.

Statistics:

  • The company has reduced its Term Debt substantially with an interest of 9% p.a. repayable over 10 years starting from July 1, 2020.
  • The balance debt of secured consortium lenders has been replaced by a 0.01% Optionally Convertible Debenture (OCD) and a 0.0001% Compulsorily Convertible Preference Shares (CCPS) of its subsidiary.
  • Approximately 13 GW of operating wind energy assets in India have been protected through this initiative.
  • The company has reduced its fixed costs by more than 70% through the debt restructuring.

Sources:

  • "Suzlon Group Completes Debt Restructuring with Unanimous Approval from Secured Lenders" - Euclid Infotech Pvt. Ltd.