Suzlon To Use Rs 1,200 Crore Rights Issue To Repay Rs 584 Crore Debt

Suzlon Energy would be able to pare its debt by Rs 583.5 crore with full subscription of its Rs 1,200 crore rights issue, the company said.

Suzlon To Use Rs 1,200 Crore Rights Issue To Repay Rs 584 Crore Debt
New Delhi:

Suzlon Energy would be able to pare its debt by Rs 583.5 crore with full subscription of its Rs 1,200 crore rights issue which opened on Tuesday, the company said.

"Rs 583.5 crore debt will be repaid with the assumption of full subscription of Rs 1,200 crore rights issue opened on Tuesday," Suzlon Group Chief Financial Officer Himanshu Mody said in a virtual press conference.

He said the total debt of the company was Rs 3,200 crore as of June quarter 2022-23 and the company would be able to repay the remaining debt in the next eight years.

Mr Mody emphasised that the company would have much leaner, healthier and better balance sheet after the issue and there will be no decline in the promoters' holding after the issue.

About an earlier instance of decline in promoter holding, he said it happened due to conversion of certain bonds (debt) into equity (under the debt restructuring plan).

Earlier this month, Suzlon Energy had said its promoters had reconfirmed their participation in the rights issue, after the demise of its founder and CMD Tulsi Tanti.

Tanti died on October 1.

As per the letter of offer, the company will issue up to 240 crore partly paid-up equity shares for cash at a price of Rs 5 per share (including a premium of Rs 3 per rights equity share) aggregating to Rs 1,200 crore.

The issue will be in the ratio of 5 rights equity shares for every 21 fully paid-up equity shares held by eligible shareholders on the record date of October 4, 2022.

The last date for on-market renunciation of rights entitlements is October 14, 2022. The promoters and promoter group have confirmed their participation and they will be fully subscribing to the extent of their rights entitlement, it had said.

Funds raised through the issue will be used for repayment or pre-payment of a portion of certain outstanding borrowings availed by the company and its subsidiaries and for general corporate purposes. 

.