Lenders admit Suzlon to CDR process, may offer fresh credit

Lenders admit Suzlon to CDR process, may offer fresh credit

Lenders have approved debt-ridden wind turbine maker Suzlon Energy to debt restructuring process, and may even offer it a fresh line of credit, sources told moneycontrol.com on Tuesday.

Lenders have approved debt-ridden wind turbine maker Suzlon Energy to debt restructuring process, and may even offer it a fresh line of credit, sources told moneycontrol.com on Tuesday.

"The last CDR meeting was held on Nov 8th with all lenders. It was then proposed to be admitted in CDR cell. On Monday, IDBI Bank , the second largest lender in the Suzlon case approved the proposed offer after SBI approved," a banker associated with the exercise of restructuring process, said.

Bankers are also actively considering a fresh line of credit. However, the visibility report for the debt recast is yet to be finalised, the banker added.

Suzlon Energy is saddled with a debt of Rs 13,700 crore, most of which was accumulated to acquire Germany's REpower Systems and Belgium-based gearbox maker Hansen Transmissions. Suzlon sold its stake in Hansen in 2011 to ease some of its debt burden. But it has had little relief as interest costs have continued to increase. Suzlon had last month defaulted on a USD 200 million convertible bond redemption.

In the first half of the financial year, Suzlon's consolidated revenue rose 11 percent to Rs 10,449 crore, helped by strong order inflows. However, it had a consolidated loss of Rs 390 crore at the EBITDA (earnings before interest, taxes, depreciation and amortization) level.

Also Read: Suzlon reports consolidated net loss of Rs 808 cr in Q2

It has submitted CDR plan to lenders and seeks a long term repayment period for debt, including two year moratorium on principal and term debt interest payments and additional working capital facilities.

SBI with loan exposure of Rs 3,610 crore is the lead bank in a consortium of eight CDR lenders and three non-CDR lenders.

IDBI Bank, which lent Rs 2,008 crore is the second largest lender in the group followed by Bank of Baroda at Rs 970 crore, Indian Overseas Bank at Rs 952 crore. Power Finance Corporation , a non-CDR lender, loaned around Rs 566 crore, sources had told moneycontrol.com earlier.

Along with the public sector lenders, three private sector banks including Axis (Rs 400 crore), ICICI(Rs 382 crore) and Yes Bank (Rs 204 crore) figured in the lenders' list for Suzlon in the recast process.

Suzlon shares jumped 11 percent on Tuesday as investors saw some light at the end of the tunnel, following its admittance to the CDR process. The stock is down over 38 percent since April this year, as the negative cashflow, default to bond holders have weighed.