Suzlon Energy updates on debt refinancing proposal

Suzlon Energy Limited ("SEL" or the "Company") has received a sanction for a term loan of an aggregate amount of Rs.4,053 Crores (hereinafter referred to as the "New Facility") from a consortium led by the REC Limited (formerly Rural Electrification Corporation Limited) ("REC") comprising of REC and Indian Renewable Energy Development Agency Limited ("IREDA") (REC and IREDA are collectively referred to as the "New Lenders") to part finance the Refinancing Proposal for the Existing Facilities, as specifically described hereafter. The break-up of the loans proposed to be availed is as follows:

i) REC: Rupee Term Loan Assistance of Rs.3,553 Crores (including fund based, non-fund based facilities and DSRA), and

ii) IREDA: Rupee Term Loan of Rs.500 Crores.

Considering that the New Lenders have specialised knowledge in relation to the power sector in India, the New Lenders may be better placed to address the specific needs of the Company and allow adequate operational flexibility for efficient running of business.

In June 2020, SEL and its certain specified subsidiaries, entered into a Framework Restructuring Agreement (hereinafter referred to as the "FRA") with a Consortium of Lenders led by the State Bank of India (hereinafter referred to as the "Existing Lenders") for restructuring the debt of the Company, in terms of the Reserve Bank of India circular dated 7th June 2019 (the "RBI Circular"). The Resolution Plan became effective from 30th June 2020. In accordance with the terms of the FRA, the Existing Lenders are being replaced by the New Lenders.

The Lead Bank (State Bank of India) has approved the Refinancing Proposal, submitted by the Company, for refinancing of the Existing Facilities as per the terms outlined hereunder:

- full repayment of the outstanding rupee term loan and non-fund based facilities aggregating to around Rs.4,359 Crores (as on 31st Jan 2022) ("Term Loan") in cash and by way of transfer / replacement of limits / providing Letter of Comfort of outstanding NFB Facilities, which is to be funded by (a) the New Facility, (b) monetisation of the assets as approved by the Existing Lenders, and (c) business operations.

- conversion of all outstanding Optionally Convertible Debentures ("OCDs") into 57.14 Crores fully paid new Equity Shares of SEL to the Existing Lenders.

- conversion of all outstanding Compulsorily Convertible Preference Shares ("CCPS") issued by Suzlon Global Services Limited ("SGSL"), a wholly owned subsidiary of SEL, into 4,454 equity shares of SGSL.

- cancellation / expiration without conversion of 49.86 Crores share warrants issued by SEL to the Existing Lenders under the FRA.

- Extinguishment of all the contractual lock-in requirement (if any) under the FRA on 99.71 Crores Equity Shares as allotted by SEL to the Existing Lenders on 27th June 2020 (hereinafter referred to as the "Refinancing Proposal" and

- Issue of 49.86 Crores convertible Warrants of SEL convertible into 49.86 Crores Equity Shares, to REC on preferential basis.

Consummation of the Refinancing Proposal is subject to receipt of approvals from all the Existing Lenders, entering into definitive documentation with the Existing Lenders and New Lenders, completion of all the condition precedents to the New Facility and Refinancing Proposal and receipt of approval of the shareholders of the Company.

Shares of Suzlon Energy Limited was last trading in BSE at Rs. 9.00 as compared to the previous close of Rs. 9.01. The total number of shares traded during the day was 15025534 in over 8211 trades.

The stock hit an intraday high of Rs. 9.35 and intraday low of 8.84. The net turnover during the day was Rs. 136289957.00.

Source : Equity Bulls

Keywords

SuzlonEnergy INE040H01021 DebtRefinancing AssetMonetisation CCPSConversion PreferentialIssue