Allen & Overy advises on complex restructuring of Suzlon Energy’s step-up convertible bonds

The bond restructuring involved holders choosing between accepting equity for their existing Bonds or exchanging their existing Bonds into a new 12-year bond series with a PIK feature. The bond restructuring, which required the approval of the Reserve Bank of India, was part of the overall debt restructuring of Suzlon, which was agreed with its consortium lenders. Holders of the Bonds voted in favour of the bond restructuring on 6 April 2020 at a virtual bondholder meeting. The delivery of equity shares and the issuance of new bonds was completed on 17 August 2020.

Singapore-based Partner, Pallavi Gopinath Aney, commented: “This was a very complex restructuring to execute, not least on account of various challenges presented by the Covid-19 pandemic. These processes tend to be quite complicated in the Indian context, given the need for various regulatory approvals and constraints around what borrowers can offer international lenders. This is now one of a handful of successful bond restructurings from India and we are delighted to have been able to assist Suzlon on this landmark transaction”.

The A&O team was led by Pallavi Gopinath Aney (Partner) with support from Husayn Reza (Senior Associate), Serena Upadhyay (Associate) and Tarang Nagar (Associate).

The A&O team has been recognised in the India Business Law Journal’s 2020 report as one of the top 15 foreign law firms for India-related work. The report states: “Allen & Overy is an undisputed leader for complex, high-value transactions with an Indian element. Its cross-disciplinary excellence is highlighted throughout its varied deal list”.

Commenting on the rise of bond defaults in Asia, Ian Chapman, co-lead of Allen & Overy’s APAC Restructuring and Recovery Group, commented: “The increasing levels of stress and distress across Asia have clearly adversely impacted issuers and the bond market, and we are involved in many of the bond defaults and restructurings across Asia. We see defaults as inevitably continuing and that bond restructurings will be integral to many of the workouts and rehabilitations to come, but that bond restructurings will be aided by the liquidity of the bond market and the willingness of bondholders, particularly sub-par entrants, to engage”.