Suzlon set to default on debt obligations
12 Oct 2012 2:38 AM GMT
Making it one of the major Indian companies to default on debt obligations, Suzlon Energy on Thursday said that bond holders have rejected its proposal seeking four-month extension to repay debt worth about $221 million while expressing hope that things would be sorted out at the earliest.
The foreign currency convertible bonds [FCCBs] worth $220.8 million [about Rs 1,172 crore] were maturing and the company was hoping to get bondholders’ nod for more time to repay the debt. Following the development, shares of the company tumbled and fell over 3 per cent to Rs 16.05 on the BSE.
‘It is somewhat disappointing that the bondholders’ meetings did not achieve the consensus we were hoping for and the four-month extension sought by us has not been granted,’ Suzlon Group Chief Financial Officer Kirti Vagadia said. Such a development is not good for any company, he said.
‘We were confident of raising the funds to meet the obligations within those four months... We are continuing our engagement with bondholders and expect to have an acceptable solution at the earliest,’ he said.
Many Indian companies, including Suzlon, have raised money through issue of FCCBs. In recent times, Suzlon has been grappling with rising debt and stiff competition in global markets.
Suzlon had issued $200 million zero coupon convertible bonds and $20.8 million 7.5 per cent convertible bond. The company on 18 September had sought extension for redeeming these bonds.
The bondholders’ meeting was held in London on Wednesday.
TROUBLED COMPANY
The foreign currency convertible bonds [FCCBs] worth $220.8 million [about Rs 1,172 crore] were maturing and the company was hoping to get bondholders’ nod for more time to repay the debt. Following the development, shares of the company tumbled and fell over 3 per cent to Rs 16.05 on the BSE.
‘It is somewhat disappointing that the bondholders’ meetings did not achieve the consensus we were hoping for and the four-month extension sought by us has not been granted,’ Suzlon Group Chief Financial Officer Kirti Vagadia said. Such a development is not good for any company, he said.
‘We were confident of raising the funds to meet the obligations within those four months... We are continuing our engagement with bondholders and expect to have an acceptable solution at the earliest,’ he said.
Many Indian companies, including Suzlon, have raised money through issue of FCCBs. In recent times, Suzlon has been grappling with rising debt and stiff competition in global markets.
Suzlon had issued $200 million zero coupon convertible bonds and $20.8 million 7.5 per cent convertible bond. The company on 18 September had sought extension for redeeming these bonds.
The bondholders’ meeting was held in London on Wednesday.
TROUBLED COMPANY
- Foreign currency convertible bonds were maturing and company was hoping to get bondholders’ nod for more time to repay the debt
- Following the development, company shares fall over 3% to Rs 16.05
- Suzlon has been grappling with rising debt and stiff competition in global markets
Next Story
