Houlihan Lokey and Avista Advisory Group Advise Bondholders on the Restructuring of Suzlon Foreign Currency Convertible Bonds

July 15, 2014

We are pleased to announce that Houlihan Lokey and Avista Advisory Group acted as exclusive financial advisors to an ad hoc group of bondholders in connection with the restructuring of USD 575.7 million in foreign currency convertible bonds (FCCBs) issued by Suzlon Energy Limited (Suzlon). The transaction closed on 15 July 2014 and represents the largest restructuring and exchange offer conducted to date in India.

Suzlon is a leading global supplier of wind turbine generators (WTGs) that operates in 33 countries across six continents and employs a workforce of over 10,000 people. The company delivers end-to-end wind power solutions, from assembly to installation and commissioning, through a comprehensive product portfolio that ranges from sub-megawatt onshore turbines at 600 kilowatts to the world’s largest commercially available offshore turbine at 6.15 megawatts. In 2013, Suzlon ranked as the world’s fifth largest wind turbine supplier in cumulative installed capacity (over 24,200 megawatts in 30 countries).

Suzlon’s financial performance deteriorated during the global recession as governments struggled to maintain incentive programs to drive demand, while increased pricing pressure from an oversupply of WTG manufacturers caused industry margins to fall. The Indian wind market, in particular, experienced decreases in demand due to prolonged uncertainty regarding two major wind energy incentive policies, rising interest rates, and tightening liquidity. Following several years of difficult business conditions, Suzlon was unable to redeem two series of FCCBs totalling $209 million when they matured in October 2012, causing cross defaults on all four series of FCCBs and the company’s domestic bank facilities.

Houlihan Lokey and Avista were retained by an ad hoc group of bondholders in December 2012 to negotiate and structure a value-maximizing transaction. Our role consisted of, among other things, assessing the company’s long-term business plan, exploring a wide range of structuring and transaction alternatives, and structuring and negotiating terms of the restructured FCCBs.

On 9 July 2014, bondholders approved the cashless exchange of all existing FCCBs (plus accrued and unpaid interest) into new FCCBs containing a cash coupon, reset conversion price, and springing second lien charge on the company’s domestic assets; Suzlon’s closing share price on 9 July 2014 was Rs 25.30 per share, representing a 64 percent premium to the fixed conversion price on the new FCCBs of Rs 15.46 per share. If you would like more information on Houlihan Lokey or Avista, please contact one of the deal team members listed.

About Houlihan Lokey

Houlihan Lokey is an international investment bank with expertise in mergers and acquisitions, capital markets, financial restructuring, and valuation. The firm serves corporations, institutions, and governments worldwide with offices in the United States, Europe, and Asia. Independent advice and intellectual rigor are hallmarks of our commitment to client success across our advisory services. Houlihan Lokey is ranked as the No. 1 M&A advisor for U.S. transactions under $3 billion, the No. 1 global restructuring advisor, and the No. 1 M&A fairness opinion advisor for U.S. transactions over the past 10 years, according to Thomson Reuters.

About Avista Advisory Group

Avista Advisory Group is a Pan-Asian investment banking advisory firm, with operations in India and Singapore, focusing on the mid-market sector. Avista’s key product expertise is across M&A, Financing, and Restructuring advisory, which is well supported by an experienced team with industry expertise across key sectors of Industrials, Services, TMT, and Infrastructure. Avista’s strategy has been to service its high growth, mid-market clientele through its integrated platform of product, industry expertise, and regional coverage across the corporate finance spectrum. Avista has an alliance with Houlihan Lokey to expand its global network and provide finance solutions to its increasing client base.

Houlihan Lokey Deal Team

Joseph W. Swanson
Senior Managing Director
Brandon Gale
Senior Vice President
Avista Advisory Group Deal Team
Rajiv Kochhar
CEO & Managing Director
Ashish Gokhale
Industry Support
Scott Alford
Houlihan Lokey