InvestorQ : What is your view about buying Suzlon at the current market price of Rs.2.50 after the recent debt recast approval? Would you recommend?
Tisha Malhotra made post

What is your view about buying Suzlon at the current market price of Rs.2.50 after the recent debt recast approval? Would you recommend?

Answer
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Moii Chavate answered.
5 months ago


It is a positive move for the company but it is too early to say if the shareholders will really benefit. However, the downside risk is almost negligible at the current market price. As you must be aware, the Suzlon debt recast plan has been approved by 100% of the lenders (both in terms of lenders and also in terms of value). Overall debt of Suzlon stood at Rs.14,262 crore with 10% of this outstanding debt is in the form of foreign currency convertible bonds (FCCB ). These also carry currency risk. Nearly half of these loans of Suzlon are currently under default. The above figure represents the total debt of the company including term loans, working capital loans, non-fund limits as well as standby letters of credit issued by the SBI and IREDA. While it is hard to say how much the company will really benefit, one thing is certain that the downside risk is quite low at the current market price. You can surely buy the stock but treat it like a long term call option.