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Suzlon Energy defaults on USD 172 million bonds

Suzlon, which has been under the pressure of high debt, falling tariffs and new commissions in wind energy business, has been looking to monetise some of its assets.

Published: 17th July 2019 08:33 AM  |   Last Updated: 17th July 2019 08:33 AM   |  A+A-

Suzlon power, Windmill

Suzlon Power

By Express News Service

MUMBAI:  Pune-based wind energy firm Suzlon Energy on Tuesday said the company has not made payment worth USD 172 million (Rs 1,180 crore) due on Foreign Currency Convertible Bonds (FCCB) and it is working towards finding a solution. This was part of the USD 546 million bonds, out of which USD 375 million was converted on September 18.

Suzlon said “the company is working on a holistic solution for its debt, and continues to be in discussions with stakeholders in relation to its outstanding debt (including the bonds)”.Care Ratings, in a ratings revision on the proposed Commercial Paper and bank facilities in November last year, had cited FCCB redemption pressure as one of the reasons for the revision.

“July 2019 series has conversion terms of Rs 15.46 per share and exchange rate of 1 USD = 60.225 INR, which is higher than the current market price by Rs 5.43 as on November 19, 2018. If the same is not converted, there would be additional debt burden on the already tight liquidity position of the company,” the rating agency said.

Suzlon, which has been under the pressure of high debt, falling tariffs and new commissions in wind energy business, has been looking to monetise some of its assets. Last week, Bloomberg had reported that Canadian firm Brookfield Asset Management was in talks to pick up majority stake in Suzlon. The firm has bank loans outstanding of over Rs 11,000 crore. 

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