Suzlon Jumps Ahead of Bankers' Meet to Resolve $1.4 Billion Debt
Lenders led by State Bank of India are expected to consider the company’s debt restructuring plan on Friday.
(Bloomberg) -- Suzlon Energy Ltd. jumped the most in five months a day before its lenders are poised to consider the beleaguered wind-turbine maker’s plan to sell its operations and maintenance business to pare debt.
Suzlon shares gained 22.4% Thursday to close at 4.1 rupees in Mumbai paring its losses for the year to 24%. The benchmark BSE Sensex index gained 9.9% this year.
The company plans to offer a so-called one time settlement to the lenders led by State Bank of India using the proceeds of the sale, people with knowledge of the matter said, asking not to be identified as the information is private. Suzlon had a net debt of 95 billion rupees ($1.4 billion) as on March 31, according to data compiled by Bloomberg.
A spokesman for SBI and a spokeswoman for Suzlon didn’t immediately respond to an email seeking comment. Approval for the proposal is critical for Suzlon as ratings on its long-term bank facilities were downgraded at Care Ratings Ltd. to D from BB in April.
“Unfortunately, on account of a temporary mismatch in cash flow, the company was unable to fund its scheduled repayment obligations to its lenders,” Suzlon Chief Executive Officer J.P. Chalasani said in an exchange filing in April, reacting to the downgrade. He said the company was actively working with lenders for a debt revamp.
To contact the reporters on this story: Baiju Kalesh in Mumbai at bkalesh@bloomberg.net;P R Sanjai in Mumbai at psanjai@bloomberg.net
To contact the editors responsible for this story: Sam Nagarajan at samnagarajan@bloomberg.net, ;Fion Li at fli59@bloomberg.net, Pradeep Kurup, Anto Antony
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