Moser Baer India Ltd (MBI), the nation’s biggest solar manufacturer, plans to restructure US$ 738 million of loans and bonds as it jostles to survive a supply glut that has claimed at least 10 US, German and French panel makers, the Bloomberg reports.
The company expects to reach an agreement with banks to restructure 35 billion rupees of secured debt by August and may sell new five year bonds to pay off dollar- convertible notes maturing in June, Chief Financial Officer Yogesh Mathur said in a phone interview from New Delhi. Its 2013 zero coupon bond is trading at 35 cents on the dollar.
Solar panel prices have plunged 48 per cent in the past year amid overproduction led by Chinese manufacturers and dwindling demand in Europe, the largest market for the equipment, where governments are curtailing clean energy subsidies. Moser Baer and Indian peers such as Indosolar Ltd (ISLR) are producing at 20 per cent of capacity as sales sputter and industry margins collapse globally.
“The time certainly is not the best” for a new issuance, said Atul Gharde, a Hongkong based credit analyst at SJS Markets Ltd. “Chinese solar companies are struggling and the yields of those bonds are at distressed levels.” Even if Moser Baer were to attract an anchor investor, selling new bonds could be “quite challenging,” he said.
Moser Baer’s shares plummeted to a 13 year low yesterday in Mumbai trading, falling 7.5 per cent. The yield rose 2.4 per cent to a record on its zero coupon bond due June, data compiled by Bloomberg showed.