Suzlon Energy Defaults on Rs 7200 Cr Worth in Loans

Debt-laden Suzlon Energy has announced via a regulatory filing that it has defaulted on loans amounting to Rs 7,256.38 crore.

Debt-laden Suzlon Energy has announced via a regulatory filing that it has defaulted on loans amounting to Rs 7,256.38 crore. The total default amount includes a principal of Rs 6,717.44 crore and interest of Rs 538.94 crore, the company said. The loans were given by a consortium of 18 banks led by the State Bank of India along with the Indian Renewable Energy Development Agency (IREDA).

According to the firm, the loans included funds based o working capital, non-fund based working capital, term loans and standby letter of credit (LOC).

In December, the firm had notified that it had appointed the State Bank of India (SBI) nominee Rakesh Sharm as the company’s nominee director. The appointment has also been approved by the company’s board of directors.

In October, the debt-laden firm had specifically denied all reports suggesting that it has filed for bankruptcy and that it will soon be approaching the National Company Law Tribunal (NCLT). “We wish to reiterate that Suzlon’s debt resolution and revival plans have never been dependent on any single option,” the firm informed stock exchanges in regulatory filings.

“The lenders and the company continue to work hard for a sustainable resolution plan to preserve the value of the company since the relevant stakeholders are mindful about Suzlon‘s contribution to Indian renewable energy sector, its strong market position together with its order book as well as industry potential,” it added.

The company said the lenders have already signed an inter-creditor agreement. In terms of the June 7 circular of Reserve Bank of India, the lenders have time till January 2020 to work on a sustainable resolution plan before taking any extreme steps.

More recently, the firm has reported the widening of its consolidated net loss to Rs 777.52 crore in the quarter ended September 30, 2019 (Q2 2019). The company had reported a net loss of Rs 625.76 crore in the corresponding quarter last fiscal. The firms’ revenue from operations fell to Rs 803.09 crore during the quarter under review as against Rs 1,194.99 crore in the year-ago period. The company’s total expenses were at Rs 1,551.16 crore as against Rs 1,850.28 crore in the same period of preceding fiscal.