The deal was unanimously approved by secured lenders and reduces Suzlon's term debt substantially.
It also replaces the balance of debt it owes to its lenders with debt securities and shares
Suzlon’s CFO Swapnil Jain said: “This debt restructuring will ease the pressure on our cash flows significantly and give us headroom for ramping up business operations.
“We have reduced our fixed cost steeply and brought down the interest costs by more than 70%.
“This has resulted in substantial reduction in the break-even point from pre-restructuring levels, ensuring a long-term sustainable business case. It improves our overall competitiveness in the marketplace, and now Suzlon is back to business from a position of strength.”
Suzlon's share price rose by 9.9% to INR 5.55 ($0.074) following the announcement of the completed deal on 1 July — the company's highest share price in 12 months.
Ready for comeback
Meanwhile, founder and chief managing director Tulsi Tanti added that shareholders and stakeholders had made a capital investment of INR 3.92 billion ($52 million) in the company, and said the deal would save thousands of direct and indirect jobs.
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 raised “significant doubts” about the company’s ability to continue as a going concern when it released its Q2 financial results in November 2019.
After announcing the completion of the debt resturing deal, Suzlon chief executive JP Chalasani said: “The wind energy sector in India is at an inflection point, and our debt restructuring has resulted in a stronger balance sheet, enabling the company to focus on capturing the tremendous growth potential in the Indian wind energy sector.”
