(Bloomberg) -- Suzlon Energy Ltd. will offer to restructure debt at a steeper discount than Indian banks have been willing to consider so far, said people familiar with the matter, pushing the wind turbine maker closer toward bankruptcy.
The Pune-based company proposes to swap its 113 billion rupees ($1.6 billion) of outstanding debt into 36 billion rupees of new debt, translating to a 68% discount, the people said, asking not to be identified as the terms are private. Lenders had earlier indicated a willingness to take a 50% haircut, the people said.
The fresh proposal follows an assessment by Suzlon's rating company, on how much debt can be sustainably recast. A meeting with creditors is planned for next week, one person said.
Lenders would now have to decide if this offer is better than what they could get if they tip Suzlon into bankruptcy court. The company's shares have lost almost half their value over the past year amid India's focus to squeeze clean energy costs, forcing wind farm developers to pass lower margins to turbine manufacturers.
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A spokesman for Suzlon declined to comment.
Suzlon shares were trading 20% higher as of 3:06 p.m. in Mumbai on Friday, paring the past year's decline to 49%.
To contact the reporters on this story: Bijou George in Mumbai at bgeorge66@bloomberg.net;Suvashree Ghosh in Mumbai at sghosh186@bloomberg.net
To contact the editors responsible for this story: Andrew Monahan at amonahan@bloomberg.net, Jeanette Rodrigues, Karthikeyan Sundaram
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