Tulsi Tanti, Sun Pharma promoters to invest Rs 400 cr in Suzlon Energy

The promoters and associates of Suzlon Energy Ltd will infuse upto Rs 400 crore as equity into the troubled renewable energy sector company through various securities as part of a debt restructuring plan.

Tanti Holdings Private Limited (promoter), Shanghvi Finance Pvt. Ltd and associates will infuse capital in company.

The board of directors, in a late night meeting on Thursday, approved the proposal for restructuring the company's debt and certain identified subsidiaries, Suzlon Energy said its filing with BSE.

Under the approved debt recast plan, the Tulsi Tanti-controlled entity will issue securities – shares, convertible bonds and warrants – to 17 lenders for converting of part of debt into equity. Some of the lenders include State Bank of India, Axis Bank, Bank of Baroda, ICICI Bank, IDBI Bank and Yes Bank.

Suzlon stock was ruling at Rs 2.6 per share, down 7.42 per cent in morning trades on BSE.

The Pune-based entity will also divest and dispose some of investment, assets and also dilute stake in some of the undertakings in line with the approved plan. However, the company did not specify assets it would sell to reduce a stake in companies.

The board also approved a proposal to appoint Sameer Shah as an “Independent Director” of the Company for a five-year term commencing February 27. His appointment is subject to regularisation by the shareholders at the next Annual General Meeting of the Company.

On issuing securities to lenders, company said it will give 100 crore shares of Rs 2 each and also issue 0.041 crore Secured Optionally Convertible Debentures of Rs 1 lakh each and 50 crore warrants of Rs 1 each.

Lenders and the company have hammered out a restructuring plan under the Reserve Bank of India (Prudential Framework for Resolution of Stressed Assets) Directions, 2019.

The directors also gave a nod for amending the Articles of Association and increase in the Authorised Share Capital and alteration of the Capital Clause of the Memorandum, it added.

They have also cleared an enabling resolution to issue equity shares/ equity-linked instruments to an extent of Rs 1,000 crore. This step is to help the company issue securities at an appropriate time should that be required.

Suzlon pins hopes on Brookfield deal for bond payback as investors wait

Investors in Indian corporate debt are watching whether a stressed wind-turbine maker will repay its dollar-denominated convertible bonds due on Tuesday, and help avoid further widening of strains in the nation’s credit market.

Suzlon Energy Ltd., which became India’s biggest convertible note defaulter when it missed payments in 2012, must repay $172 million outstanding on such securities that were issued as part of a debt restructuring. While that revamp helped the company’s shares surge in 2014-2015, they’ve since slumped after India’s shift to auctions for building wind projects increased competition and diluted Suzlon’s market share.

The company’s bank facility ratings were cut to default by Care Ratings in April after it failed to meet payback obligations to its lenders. Any delay in repayments on the convertibles could further spook credit investors already reeling under a spate of defaults in the last year, from IL&FS Group to Dewan Housing Finance Ltd.

Some traders in Suzlon’s bonds are pinning their hopes on a proposed acquisition of the embattled company by Toronto-based Brookfield Asset Management Inc. A person familiar with the matter said earlier in July that Brookfield may make a binding offer for a stake in the company as soon as the end of the month.

“Suzlon’s bondholders don’t have many choices now,’’ according to Raj Kothari, London-based head of trading at Jay Capital Ltd. “The redemption will depend on the progress of the Brookfield deal.’’

A spokeswoman at Suzlon, which is based in Pune in the Maharashtra state, declined to comment.

Shares of the company were at Rs 4.86 at 12:45 p.m. in Mumbai, close to the lowest since its 2005 listing on the exchange.