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Suzlon tumbles 6% as stake sale to Brookfield unlikely

Lenders are working closely with the company to resolve the issue, as per the inter-creditor agreement which was signed mid-July.

, ET Bureau|
Aug 07, 2019, 01.54 PM IST
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Shares of Suzlon Energy were down 6.4% to Rs 4 At 12.15 IST Wednesday, after ET reported that Canadian investor Brookfield is not looking at acquiring a majority stake in Suzlon Energy anymore as it could not reach a deal with the wind-turbine maker’s lenders on valuation.

ET reported on Wednesday, quoting sources in the know, that Brookfield is not more interested in buying a stake in the troubles wind turbine maker as it had demanded a 60-70% haircut on its debt which was unacceptable to the bank's. ( 'Brookfield drops plan to buy Suzlon stake')

Lenders are working closely with the company to resolve the issue, as per the inter-creditor agreement which was signed mid-July.

On June 24, ET was first to report that Suzlon had offered a one-time settlement to its lenders. That comprised a potential stake sale to Brookfield that would infuse additional equity in the company, and a considerable waiver on the debt by lenders including holders of foreign currency convertible bonds, which could help the company scale up operations and meet the remaining financial obligations. ( Suzlon offers to sell majority stake to Brookfield for settling loans)

The Tulsi Tanti-led company had net term debt, including foreign currency convertible debt, of Rs 7,761 crore and working capital debt of 3,380 crore.

Suzlon’s one-time settlement offer to lenders came after the company defaulted on repayment of principal and interest to lenders towards term loans, working capital facilities, and in making payments to certain overdue creditors in FY19. The company then defaulted on a $172 million (Rs 1,200 crore) foreign currency convertible bond redemption on July 16.

Suzlon has maintained that it was working on a “holistic solution” for its debt.

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