According to a company press release, the Dutch unit of Suzlon Energy, AE Rotor Holding BV, issued $647 million worth of bonds in order to reduce debt.
The company would utilise the fund to repay loans as part of a debt restructuring deal with its creditors.
Specifically, the proceeds of the bond sale would be used to refinance existing dollar-denominated foreign currency debt of the company and its unit.
Suzlon Energy could access debt markets more easily because the State Bank of India, one of its lenders, issued a stand-by letter of credit–or a guarantee–to potential bond buyers.
AE Rotor offered a coupon of 4.97 percent on the five-year US dollar bond, which is priced at par and has been provisionally rated Baa2 by Moody’s.
On the back of slowdown in global demand for wind energy as well as technical problems in some of its products, Suzlon ran into grave financial problems. Its lenders recently approved a plan to restructure $1.86 billion of debt, provided Suzlon raises $1 billion in three years through sale of shares and other assets.
The firm said the bond issue completes one of the key requirements of its corporate debt restructuring proposal and addresses its major bank debts.
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