SBI Alert: The State Bank of India (SBI) has approved Suzlon Energy — a wind power company — proposal to revamp its Rs 12,700 crore debt. The largest Indian Commercial Bank’s move is seen as a big relief for the debt-laden wind energy firm Suzlon Energy. Under the SBI approved debt revamp plan, Suzlon Energy’s Rs 12,700 crore debt will be converted into sustainable debt and non-sustainable debt. Suzlon Energy will pay this debt for over 20 years.
According to sources at SBI, up to 35 per cent of the debt has been kept in the sustainable debt category and Suzlon Energy will repay this portion of Rs 12,700 crore in the next 10 years. After repayment of the sustainable debt, Suzlon Energy will have to pay the rest, which has been kept by the SBI in the non-sustainable debt category. While repaying the non-sustainable debt, Suzlon Energy has been asked to repay non-convertible debentures and compulsorily convertible preference shares (CCPs).
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SBI will pick up 10 per cent share in Suzlon Energy immediately on issue of shares and 49 per cent stake in its subsidiary, Suzlon Global Services Ltd (SGSL), after conversion of CCPs in the next 20 years. SBI’s approval of Suzlon Energy’s debt-restructuring proposal is the first step forward in the wind power firms’ resolution plan. Since Suzlon Energy has entered the inter-creditor agreement (ICA) on 1st July 2019, the proposal will be tabled at the consortium of other lenders because the debt-restructuring proposal needs the ratification of 66 per cent other lenders.
Suzlon Energy promoters that include Tulsi Tanti, have promised to bring in equity worth Rs 275 crore. In fact, the Suzlon Energy promoters have already begun talks with other lending institutions for a working capital loan. Tulsi Tanti is expected to sell out its assets including its headquarter based in Pune.