Bondholders of Suzlon Energy plan legal action post default: Report

Following the default on repayments by India’s largest wind turbine maker -- Suzlon Energy, its bondholders plan to initiate legal action against it, reports Business Standard. Legal firm Kirkland & Ellis has been hired by bondholders to chart out a strategy for further action.

As banks are unlikely to take a steep haircut on their Rs 10,300 crore exposure, an informal deal with Brookfield seems to be off the table. The Canadian asset management company had earlier offered to takeover Suzlon, provided banks took a sharp haircut. However, lenders could not reach an agreement with the company on the amount that they were expected to forego.

A senior banker told The Economic Times that Brookfield has asked lenders to take a 60-70 percent haircut on their debt.

In mid-July, Suzlon defaulted on its foreign currency convertible bonds (FCCB) worth $172 million. Following this, secured creditors of the firm had signed an inter-creditor agreement, which allowed lenders to arrive at and implement a strategy towards resolution of the stressed account.