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Rediff.com  » Business » Suzlon bondholders reject extension; stock down 5%

Suzlon bondholders reject extension; stock down 5%

October 11, 2012 11:26 IST
Wind turbine maker Suzlon Energy on Thursday said bondholders have rejected its proposal seeking four-month extension to repay debt of nearly $221 million.

The Foreign Currency Convertible Bonds (FCCBs) worth $220.8 million (about Rs 11.72 billion) are maturing today.

"I regret to announce that the bondholders' meetings did not achieve the consensus we were hoping for and the four-month extension sought by us has not been granted," Suzlon group chief financial officer Kirti Vagadia said in a statement.

Shares of the company slumped 3.63 per cent to Rs 15.95 in early trade on the BSE.

Suzlon had issued $200 million zero coupon convertible bonds and $20.8 million 7.5 per cent convertible bond. The company on September 18 had sought extension for redeeming these bonds.

Noting that the company expects an acceptable solution at the earliest, Vagadia said, "We continue to enjoy the support and confidence of our secured lenders for our business objectives."

"We believe our ongoing engagement with them and our bondholders continues to be both constructive and progressive, and geared towards addressing our liabilities and our overall capital structure in a holistic manner."

In recent times, Suzlon has been grappling with rising debt and stiff competition in global markets.

Vagadia said, "Suzlon Group appreciates the loyalty of its customers, the support of its suppliers and the dedication of its employees through this process.

"In addition, with an order book in excess of $7.2 billion, we believe the business can - and will - stabilise and the group's senior management is committed to restoring the company to a position of strength."

The company had redeemed FCCBs of $360.2 million in July this year.

Suzlon's net debt touched Rs 11,165 crore (Rs 111.65 billion) at the end of March 2012.
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