The mortgage sale was concluded even because the wind vitality firm was within the midst of its second bank-led restructuring initiated in 2020. The REC and IREDA-led refinance would lengthen the tenure of Suzlon’s loans and would additionally bear a decrease rate of interest than what it was paying banks, a number of folks conversant in the contours of the deal mentioned.
“It’s a win-win for each banks and the corporate. Banks are eliminating a troubled account which is exhibiting no indicators of restoration.
will get a greater compensation schedule and a less expensive charge of curiosity which makes the corporate’s monetary place extra sustainable,” mentioned an individual conscious of the deal.
In response to the restructuring initiated by banks in 2020, Suzlon’s gross debt of ₹11,000 crore was sliced into sustainable (₹4,000 crore), unsustainable (₹3,000 crore) and a few of it was transformed into fairness shares (₹4,000 crore).
“In response to the restructuring plan the corporate had time until 2028 to repay its dues at a mean rate of interest of 11%. Now the brand new refinancing envisages time until 2030 and an preliminary rate of interest of 9.5% which is an excellent deal for Suzlon. Furthermore now with the compensation of dues, the non-performing asset (NPA) tag that banks had placed on the corporate is off and a few banks can afford to write down again provisions this quarter,” mentioned a second particular person conscious of the transaction.
In a discover to the inventory exchanges on Might 25, Suzlon had mentioned that the specialised energy sector information of REC and IREDA would put them in a greater place to deal with the precise wants of the group and permit satisfactory operational flexibility for the environment friendly operating of the enterprise.
“We’ve got accomplished our debt refinancing exercise, changing our 16 lenders with two new lenders who include specialised area information of the ability sector. This transfer will assist our future progress plans,” the corporate mentioned in response to ET’s queries.
REC and IREDA didn’t reply to an e mail in search of remark.
As per the settlement, banks will proceed to carry an fairness stake within the firm with the conversion of optionally convertible debentures (OCD) and compulsorily convertible desire shares (CCPS). Banks additionally don’t want to keep up a lock-in for the stake held by them and are free to promote it within the open market as desired.
SBI is the most important banker with ₹2,900 crore of dues excellent, adopted by BoB with ₹1,550 crore and
with ₹1,500 crore in a consortium of 16 banks.
“The very fact is that any restoration from this account appeared uncertain. Infusion of fairness from promoters was additionally taking time. Banks have taken the very best choice on the premise of obtainable data. If we’re fortunate we could get some upside on the shares we maintain. For now, it is over to REC,” mentioned a 3rd particular person conscious of the transaction.
