Suzlon promoters offload 6.2% stake worth $45M to support CDR, Morgan Stanley buys it

The promoters of wind turbine manufacturer Suzlon Energy Ltd have sold around 6.19 per cent stake to raise Rs 240 crore ($45 million). This was part of the corporate debt restructuring (CDR) plan of the company, according to a BSE disclosure.

As per the filing, “Part of the funds so raised would be infused into the company by suitable mode at the earliest, subject to applicable law to comply with equity infusion requirement under CDR mechanism as promoter contribution, which in current liquidity situation would also support the operations of the company. Balance funds would be utilised to release pledged shares for repayment of loans taken by promoters.”

Last month, the company got formal approval for its proposal to restructure domestic debt from the CDR cell. A consortium of 19 banks approved the CDR package of Rs 9,500 crore ($1.8 billion) including a two-year moratorium on principal and term-debt interest payments, 3 per cent reduction in interest rate and a six-month moratorium on working capital interest. As part of the package, Rs 1,500 crore (two years’ interest payment during moratorium) will be converted into equity or equity-linked instrument over the next two years, to bring stronger financial stability, and there will be a 10-year door-to-door back-ended repayment plan.

The firm disclosed that the promoters would also bring in Rs 250 crore equity within a stipulated time frame, of which Rs 62 crore had already been infused.

On Thursday (Feb 28, 2013), the Tanti family sold 10.99 crore shares, which represent around 6.19 per cent of the paid-up capital, for about Rs 240.40 crore. The promoters’ holding in the company has now reduced to 44.46 per cent.

All the shares were acquired by Morgan Stanley Asia (Singapore) Pte.

PE-backed Suzlon’s scrip crashed 34 per cent to close at Rs 16.05 on the BSE in a weak Mumbai market on Thursday.

The company is backed by Citigroup Venture Capital International (CVCI) and IDFC Alternatives or IDFC PE.

Also read: Suzlon gets approval for debt restructuring proposal of $1.8B

(Edited by Sanghamitra Mandal)

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