The CDR proposal involves a 10-year door-to-door back-ended repayment plan with a reduced interest rate, which effectively means a 3% savings on interest burden for financially troubled Suzlon
Mumbai: Wind energy major Suzlon said its lenders, comprising 19 banks led by State Bank of India (SBI), have approved its proposal to rejig Rs9,500 crore of domestic debt, providing a big relief to financially troubled company, reports PTI.
“The empowered group of corporate debt restructuring (CDR) cell comprising 19 lenders formally approved our CDR proposal to recast Rs9,500 crore of domestic debt. The package is effective from 1 October 2012 and does not include our foreign currency debt,” Suzlon said in a statement.
The Tulsi Tanti-promoted company further said, the CDR proposal involves a 10-year door-to-door back-ended repayment plan with a reduced interest rate, which effectively means a 3% savings on interest burden for the company.
The proposal also involves a two-year moratorium on principal and term-debt interest payments, apart from a fresh working capital loan of Rs1,800 crore, which will have a six-months interest moratorium, which is aimed at helping the company accelerate execution of its strong order book.
During the course of the two-year moratorium, interest worth Rs1,500 crore will be converted into equity, the company said.
The Pune-headquartered company further said that the package also includes promoters bringing in Rs250 crore of fresh equity, of which Rs62 crore was infused last December.
“This approval clearly underscores the fundamental viability of our business,” Kirti Vagadia, chief financial officer of the Suzlon Group.
SBI is the consortium leader and the CDR plan has been drafted by SBI Caps. SBI has a Rs3,500-crore exposure to the company.
Suzlon was looking at recasting Rs11,000 crore of its Rs14,568 crore domestic loans (as of the September quarter).
This debt is four times its equity. It sought the debt restructuring process during late October.
The other main lenders include IDBI Bank, Bank of Baroda, Axis Bank, Punjab National Bank, Indian Overseas Bank, Central Bank of India, Yes Bank, and State Bank of Bikaner & Jaipur, among others.
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