Suzlon Energy In For A Cashless Restructuring Process Worth USD 485 million

Suzlon Energy, the world's fifth largest wind turbine maker, has announced that its board of directors have approved a cashless restructuring proposal in respect of the existing Foreign Currency Convertible Bonds (FCCBs) worth USD 485 million for five years.

Currently, Suzlon Energy has four series of FCCBs i.e. USD 200 million Zero coupon convertible bond that was due in October 2012, 7.5% FCCBs of USD 20.8 million due in October 2012, Zero coupon convertible bond of USD 90 million due in July 2014 and 5% FCCBs of USD175 million due April 2016. Out of these all FCCBs only, 5% April 2016 are 50% substituted and rest all are fully substituted, which includes unpaid interest and default interest.

The conversion price for the said FCCBs is Rs 15.46 (10% over the regulatory Floor Price) and maturity period is 5 years and one day from the date of issue. But the restructuring proposal, including the terms of the new restructured bonds, are subject to the approval of the Reserve Bank of India, the CDR (Corporate Debt Restructuring) empowered group (of banks) and the requisite majority of the holders of the existing bonds in each series. For the same, company is confident to get all the approval from the above mentioned authority.

If the company successfully completes the restructuring process it will get five more years to repay these FCCBs which is mostly favourable for the company, as it is currently not able to pay interest on time due to weak financial condition.

Suzlon Energy announced the restructuring proposal on Saturday (3 May 2014) which is a non-trading day. Hence the news has been discounted by the street in today's trading session as the company’s stock went up by 7.8% to Rs 15.5 per share over its previous closing price.