Shareholders approved all ten items on a postal ballot sent on 19 April, following lenders approving the deal in late March. The manufacturer is now able to proceed with its debt restructuring plan.
The plan effectively divides the manufacturer’s total debt of INR 118 billion ($1.58 billion) into sustainable debt of INR 36 billion ($484 million) and INR 82 billion of unsustainable debt.
Suzlon’s share price opened up 1.9% at INR 2.6 on 19 May in anticipation of the ballot results and then increased a further 3.85% to INR 2.7 when markets opened on 20 May, after the results were made public.
The company was due to hold the vote in its extraordinary general meeting in March, but this was cancelled due to India’s nationwide lockdown amid the coronavirus (Covid-19) pandemic. It decided to hold the ballot by post.
Companies including German gearbox manufacturer ZF, portfolio investor Belgrave Investment Fund and Suzlon managing director Tulsi Tanti’s Tanti Holdings have reportedly invested in the manufacturer to bring in fresh equity. ZF has several factories in India. It would not comment on whether it had bought a stake.
Suzlon had been hit hard by India’s shift from a feed-in tariff system to energy auctions with lower prices, with Indian manufacturers reporting reduced turbine sales and installation figures.
Its losses mounted in 2019 and auditors even raised “significant doubts” about the company’s ability to continue as a going concern when it released its Q2 financial results in November 2019.
Suzlon's CEO J P Chalasani said that the company could resume its operations following the completion of formalities and end of lockdown in India.
The company's chief financial officer Swapnil Jain added: "With trimmed debt and new equity infusion, the capital structure of the company will get fixed, and we shall be back in business.”