Banks clear Suzlon Energy debt resolution plan

    Banks clear Suzlon Energy debt resolution plan
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    By Ritu Singh   IST (Updated)

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    Lenders to debt-laden wind energy producer Suzlon Energy have approved the rescue plan under RBI’s June 7 circular.

    Lenders to debt-laden wind energy producer Suzlon Energy have approved the rescue plan under RBI’s June 7 circular.
    The resolution plan has been unanimously approved by the consortium of lenders, and the company is working on finalising various definitive agreements with the lenders, stated a company statement issued on Monday.
    Lenders are looking to take 10 percent equity in Suzlon Energy as part of draft restructuring plan which involves splitting of the total debt into sustainable and unsustainable portions, bankers familiar with the plan had told CNBC-TV18 on the condition of anonymity.
    CNBC-TV18 had earlier reported on the contours of the resolution plan, which involves a 38 percent recovery for SBI-led members of the consortium.
    “State Bank of India, the lead bank of the consortium of lenders, has, vide its email dated 29th March 2020, conveyed that the resolution plan of the Company and its certain identified subsidiaries (the “Resolution Plan”) formulated under the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019 issued by Reserve Bank of India vide its circular dated 7th June 2019 (the “RBI Circular”), as was approved by it and subsequently circulated to the consortium of lenders, was put to vote by the consortium of the lenders and which has since been approved by 100% of lenders by value, and 100% of lenders by numbers” Suzlon said.
    Suzlon Energy sought to convert Rs 7,700 crore of its debt into convertible debentures, and another Rs 3,600 crore was to remain as loans on the book. The remaining portion of debt would continue in form of non-fund exposure for banks.
    Suzlon owes Rs 12,785 crore to a consortium of 18 banks led by State Bank of India. The board of the company had approved the resolution plan on February 27, and by the banks thereafter. The voting on the plan was delayed due to COVID-19 lockdown, and was conducted between March 26 and March 29, according to the banks familiar with the matter.
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