7 August 2019: Brookfield’s plan to acquire a majority stake in Suzlon Energy has fallen through, after the Canadian investor could not reach a deal with the wind-turbine maker’s lenders on valuation, two people aware of the development said.
Lenders did not agree to the amount that Brookfield wanted them to forego to proceed with the deal, and are now working with Suzlon on other resolution plans, they told ET.
“Brookfield was interested in Suzlon only if the valuation was attractive,” one of the people said. “The haircut on loans that they were asking was not acceptable to banks.”
Brookfield had asked for a 60-70% haircut on the debt, a senior banker said, adding: “The deal with Brookfield is not happening.”
Emails to Suzlon and Brookfield seeking comment remained unanswered at press time Tuesday.
Suzlon, which has defaulted on loan repayments and has loans categorised as non-performing asset by lenders, was banking on a deal with Brookfield to resolve its stressed debt. In July, its secured creditors signed an inter-creditor agreement to resolve the debt crisis by working with the company. According to a central bank directive on June 7, such agreements must be signed within 30 days of the first default to any lender.
Lenders are working closely with the company to resolve the issue, the senior banker said. “There is still some time as per the inter-creditor agreement signed mid-July.”
On June 24, ET reported that Suzlon had offered a one-time settlement to its lenders. Shares of Suzlon closed 1.7% lower at Rs 4.25 on the Bombay Stock Exchange Tuesday.