SUZLON FCCB Default Case: Indian wind-turbine major, Suzlon Energy a company promoted by Mr.

Tulsi Tanti defaulted on $221million worth of foreign currency convertible bonds (FCCBs) maturing on Oct 11, 2012 as the bondholders turned down the proposal to extend the maturity of the overseas bonds. Suzlon Energy had issued $200mn zero-coupon convertible bonds and $20.8mn 7.5% convertible bonds, both due in Oct 2012. Suzlon requested for the extension on the bonds maturity, saying it needed time to raise funds from sources, including fresh debt and the sale of non-critical assets. Suzlon, which is world's fifth-largest maker of wind turbines, had been under pressure due to a slowdown in global turbine sales and its debt, stood at Rs.130.17bn, at a group level. In July 2012, Suzlon redeemed $360mn of FCCBs after bondholders agreed to a 45-day deadline extension, allowing the company to raise bank loans for the repayment. Suzlon was under pressure to raise cash after a lack of working capital constrained its ability to complete orders in the quarter that ended Jun 30 2012, the company reported its secondbiggest quarterly loss since 2007. As companys conditions weakened Stock plunged about 83% in the last three years, wiping out $2.5 billion from its market value. The share price tanked to Rs16.15 making conversion of the debt into equity meaningless. The debt-laden wind turbine maker, was set to default, but a Consortium of banks including SBI, Bank of Baroda and ICICI Bank, in an attempt to restructure the companys debt amounting to Rs.140bn, came forward and gave loan to Suzlon in July, 2012 that saved it from default.