This Article is From Mar 24, 2013

Suzlon to sell $650 mn bonds overseas on Monday as part of CDR


Suzlon Energy, which recast its loans in January, is hitting the overseas bond markets to raise $650 million to prepay its forex debts, making it the first domestic company under CDR to do so, according to company and merchant banking sources.

The $650 million dollar-denominated bonds sale programme, beginning Monday, is necessitated by the fact that the recent Rs 9,500 crore corporate debt restructuring (CDR) did not include the forex loans, a company source with direct knowledge of the development said.

The money will not flow into the company kitty but to the 19-member consortium of domestic lenders, sources said.

The bond sale is a part of the debt restructuring package announced on January 24 by beleaguered Suzlon Energy, the world's fifth largest wind turbine maker.

The situation is unique as the company has just undergone a CDR and banks are ready to help the troubled company as they feel that it would be better for them to help Suzlon finance the $650 million worth of foreign bonds maturing over the next one year or so.

The CDR also involved a two-year moratorium on principal and term-debt interest payments, apart from a fresh working capital loan of Rs 1,800 crore with a six-month interest moratorium to help the company accelerate execution of its strong order book of around $7 billion.

During the two-year moratorium, interest worth 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 package.