New Delhi: Bondholders of the Suzlon Group on Monday approved the company’s proposal for an extension of the maturity date of the FCCBs until July 27, 2012, sending Suzlon Energy shares higher.
Suzlon, owner of Germany-based REpower, needs to repay foreign currency convertible bonds (FCCBs) of $360 million in June and another $207 million in October. The company had earlier sought 45 days extension to repay FCCBs.
Shares closed higher by 1.11 per cent at Rs 18.20, while the Sensex ended down 50.86 points, or 0.3 per cent, at 16,668.01 points.
The company's secured lenders have reportedly agreed to sanction $300 million in external commercial borrowing (ECB). While the company has received sanctions for $285 million in ECBs, the balance is likely by June-end, sources said. The ECBs are priced at 350 basis points over the LIBOR or the London Inter Bank Offered Rate, sources added.
The company will repay the remaining $60 million via internal accruals and asset sales.
Speaking on the development, Kirti Vagadia, chief financial officer, Suzlon Group said: "I am very pleased to inform that our bondholders have approved our request for up to a 45-day extension of maturity on our June tranche of FCCBs. The resolutions were approved by significant majorities, with 100 per cent and approximately 93 per cent of bondholders who voted in the June 2009 and June 2007 series, respectively, being in favour of the extension. We have also received the necessary permission from the RBI for this extension. We believe this underscores the strong relationship we have built with our bondholders and banks, and their confidence in our plans."
"We requested for extension in order to ensure that there is adequate time to obtain the requisite approvals and to close administrative documentation necessary to complete this refinancing exercise. I am happy to report that the process is on track and, along with our plans to divest non-critical assets, we are confident of meeting our near term FCCB obligations," he added.
Suzlon's foreign currency bonds have conversion prices of Rs 76.68 rupees and Rs 97.26 per share, far above Suzlon's current share price, making them unattractive for bondholders to convert into shares.
Suzlon's shares, valued at $755 million, have lost nearly 60 per cent in a year, partly on concerns about the company's ability to repay its debt.
The consolidated net debt for the company at the beginning of the year was Rs 117.90 billion and its net debt to equity ratio was 2.1.
Shares in Suzlon and many other renewable energy companies, once darlings of investors, have struggled since the global financial crisis of 2008.
(With inputs from Reuters)
Suzlon, owner of Germany-based REpower, needs to repay foreign currency convertible bonds (FCCBs) of $360 million in June and another $207 million in October. The company had earlier sought 45 days extension to repay FCCBs.
Shares closed higher by 1.11 per cent at Rs 18.20, while the Sensex ended down 50.86 points, or 0.3 per cent, at 16,668.01 points.
The company's secured lenders have reportedly agreed to sanction $300 million in external commercial borrowing (ECB). While the company has received sanctions for $285 million in ECBs, the balance is likely by June-end, sources said. The ECBs are priced at 350 basis points over the LIBOR or the London Inter Bank Offered Rate, sources added.
The company will repay the remaining $60 million via internal accruals and asset sales.
Speaking on the development, Kirti Vagadia, chief financial officer, Suzlon Group said: "I am very pleased to inform that our bondholders have approved our request for up to a 45-day extension of maturity on our June tranche of FCCBs. The resolutions were approved by significant majorities, with 100 per cent and approximately 93 per cent of bondholders who voted in the June 2009 and June 2007 series, respectively, being in favour of the extension. We have also received the necessary permission from the RBI for this extension. We believe this underscores the strong relationship we have built with our bondholders and banks, and their confidence in our plans."
"We requested for extension in order to ensure that there is adequate time to obtain the requisite approvals and to close administrative documentation necessary to complete this refinancing exercise. I am happy to report that the process is on track and, along with our plans to divest non-critical assets, we are confident of meeting our near term FCCB obligations," he added.
Suzlon's foreign currency bonds have conversion prices of Rs 76.68 rupees and Rs 97.26 per share, far above Suzlon's current share price, making them unattractive for bondholders to convert into shares.
Suzlon's shares, valued at $755 million, have lost nearly 60 per cent in a year, partly on concerns about the company's ability to repay its debt.
The consolidated net debt for the company at the beginning of the year was Rs 117.90 billion and its net debt to equity ratio was 2.1.
Shares in Suzlon and many other renewable energy companies, once darlings of investors, have struggled since the global financial crisis of 2008.
(With inputs from Reuters)
