Suzlon Energy Ltd., the wind-turbine maker that suffered India’s biggest convertible-bond default last year, said it’s nearing an agreement with creditors.
Suzlon is “not very far from a solution” that will cover all of its bonds, including those maturing in 2014 and 2016, Group Chief Financial Officer Kirti Vagadia said by telephone.
The company failed to repay $209 million of notes last October after turbine prices slumped amid overcapacity. That triggered a cross-default clause allowing investors holding its 2014 and 2016 bonds to demand early repayment of about $265 million. Bondholders haven’t yet exercised that right, Suzlon said in its quarterly results yesterday.
“There is no pressure from lenders,” Vagadia said, denying that creditors may force Suzlon to sell part of its German unit REpower Systems SE to pay down debt. “They understand the value of all the assets the company holds.”
Vagadia attributed the lengthy negotiations to the complexity of dealing with four sets of bondholders across different regions and regulatory regimes. Local lenders led by State Bank of India, which agreed to restructure 95 billion rupees ($1.5 billion) of Suzlon debt in April, also stand to get paid before bondholders, according to Elara Capital Plc.
Suzlon targets $400 million in asset sales to help raise cash. The Pune-based company is in talks with buyers about its SE Forge unit, which it hopes to divest by the end of the fiscal year in March, Vagadia said.
It’s too early for Suzlon to approach NRG Energy Inc. about recovering a $217 million payment for turbines supplied to Edison International for an Illinois wind farm in 2009, Vagadia said. NRG Energy agreed this month to buy most of the assets of Edison International’s bankrupt wind unit.