Suzlon turns to CDR over $220 million debt

INDIA: Suzlon has resumed discussions with the bond holders over the $220 million the company was supposed to pay back this month.

The company has $200 million in bonds and $20.8 million in convertible notes that matured on 11 October. On the same day, Suzlon failed in an attempt to persuade its creditors to extend the deadline by four months.

In a statement today, Suzlon said it has offered to restructure the debt with a 10-year maturity period under the Corporate Debt Restructuring (CDR) mechanism. This would include a two-year moratorium on principal and interest payments.

Additionally, the company has suspended its guidance for 2012.

Speaking about the repayment, Suzlon chief financial officer Kirti Vagadia said: "This is an important step towards stabilizing our business by enhancing liquidity and injecting additional working capital. We believe this will help us to safeguard the interests of our key stakeholders, including customers and vendors."

He added: "Considering our overall business outlook, we recognise that despite strong business fundamentals and a US$7.2 bn orderbook, liquidity constraints over the first half of the fiscal, a volatile market environment, and the timeline of the CDR process will continue to impact performance."

Suzlon is currently looking to cut manpower costs by 20% as part of its Project Transformation programme.