Suzlon Energy raises US$647 million to repay loans

Bonds used are backed by the State Bank of India.

Suzlon Energy Ltd, India’s leading maker of wind turbines, will use the funds to repay loans as part of a debt restructuring deal with its creditors.
The U.S. dollar bonds that are due in five years were issued by Suzlon’s Dutch unit AE Rotor Holding B.V.

The bonds, priced at par, carry a coupon of 4.97% and has been provisionally rated Baa2 by Moody's.

The State Bank of India issued a stand-by letter of credit to potential bond buyers, which helped the company access debt markets more easily.

Suzlon ran into massive financial problems due to a slowdown in global demand for wind energy and technical problems in some of its products. Its lenders recently approved a plan to restructure US$1.9 billion in debt, provided Suzlon raises US$1 billion in three years through sale of shares and other assets.

Suzlon will use the proceeds of the bond sale to refinance existing dollar-denominated foreign currency debt. It said it is continuing talks with the holders of its foreign currency convertible bonds and banks to manage its liabilities.

Suzlon said that funds raised completes one of the key requirements of its corporate debt restructuring proposal and addresses its major bank debts.