Financial Briefs

India and overseas

REC raises $700 million through GMTN programme (India)

REC Limited has raised $700 million through global medium term notes (GMTN) after its initial foray of $5 billion GMTN programme into the 144a market (US Securities and Exchange Act 1933). This is one of the largest dollar transactions by any non-banking financial corporation. It was oversubscribed by approximately 2.5 times, with participation by more than 90 major international investor accounts. The proceeds of the bond issue will be used to finance power projects in accordance with the approvals granted by the Reserve Bank of India from time to time and in accordance with European Central Bank guidelines.

BHEL board approves buyback of shares aggregating Rs 16.28 billion

Bharat Heavy Electricals Limited’s (BHEL) board has approved a proposal to buy back 189.3 million shares, aggregating Rs 16.28 billion, through the tender offer route. The buyback, priced at Rs 86 apiece, will represent 5.16 per cent of the paid-up share capital of the company.

KEC International to sell entire stake in Rajasthan project to Adani Transmission

KEC International Limited has signed a share purchase agreement with Adani Transmission Limited (ATL) for selling its entire stake in KEC Bikaner Sikar Transmission Private Limited (KBSTPL) at an enterprise value of Rs 2.27 billion. The KBSTPL project comprises the 400 kV 344 ckt. km double circuit Bikaner-Sikar line in Rajasthan, which was awarded to KEC International through competitive bidding and commissioned in end-2017. The acquisition will enhance Adani Transmission’s cumulative network to 12,923 ckt. km. The sale is subject to the approval of Rajasthan Rajya Vidyut Prasaran Nigam Limited and is expected to close by the year end.

Renascent Power signs share purchase agreement to acquire 75.01 per cent stake in Prayagraj Power

Renascent Power Ventures Private Limited, a wholly owned subsidiary of Resurgent Power Ventures Pte Limited, has signed a share purchase agreement with a consortium of lenders led by the State Bank of India to buy a 75.01 per cent stake in Prayagraj Power Generation Company Limited, which owns and operates a 1,980 MW supercritical power plant in Uttar Pradesh. This transaction is the result of the stressed asset resolution process initiated by the lenders through competitive bidding. The transaction is expected to be closed over the next few months. Resurgent Power is a joint venture between Tata Power International Pte Limited (a wholly owned subsidiary of Tata Power), ICICI Bank and leading global investors including the Kuwait Investment Authority and the State General Reserve Fund, Oman.

Insolvency proceedings initiated against Konaseema Gas Power Limited

IDBI Bank has initiated insolvency proceedings against Konaseema Gas Power Limited due to payment default. Konaseema Gas operates a 445 MW gas-based power plant at Ravulapalem, Andhra Pradesh. The bank has approached the National Company Law Tribunal with a petition to initiate corporate insolvency proceedings and recover dues. Along with a Rs 1.5 billion overseas credit line, the bank had extended several other facilities such as term loans, with total dues amounting to Rs 6.63 billion. The gas-fired combined cycle power plant, set up at a capital cost of Rs 21 billion, is part of the diversified VBC Group.

Avantha offers to pay Rs 24.3 billion to avoid insolvency of the Jhabua power plant

Avantha Holdings has offered to pay Rs 24.3 billion to lenders to avoid insolvency proceedings for its 600 MW Jhabua power plant in Madhya Pradesh. The lenders, led by Axis Bank, were looking for firms to bail out the project outside the Insolvency and Bankruptcy Court. The lenders have also cancelled the bid of the Worlds Window Group, which had emerged as the successful bidder for the power plant. Avantha Holdings plans to seek Rs 19 billion from Deutsche Bank, and is also in discussions with investors for Rs 5.3 billion through an equity infusion.

 ADB to scale up smart meter project in Uttar Pradesh

The Asian Development Bank (ADB) is planning to scale up a satellite-based smart meter project implemented by Energy Efficiency Services Limited (EESL) in Uttar Pradesh. As a part of ADB’s $200 million loan to EESL for implementing various demand-side energy efficiency projects, the ADB-assisted pilot project is running in Varanasi where around 5,000 households have got smart meters with satellite communication technology.

SoftBank hires Deutsche Bank for investment in Saudi Arabia (Japan)

Japanese firm SoftBank has hired Deutsche Bank to advise it on its power investment plans in Saudi Arabia. The company is planning to invest in a major solar power plant and has also shown interest in electricity distribution in Saudi Arabia. Earlier, in March 2018, SoftBank had signed an agreement to create the world’s biggest solar power generation company in Saudi Arabia, with a capacity of 200 GW by 2030.

TEPCO buys minority stake in Vietnam hydro plant (Vietnam)

Tokyo Electric Power Company Holdings Inc. (TEPCO) has acquired a minority stake in the 29.7 MW Coc San hydro plant in Vietnam. It has bought 36.38 per cent of shares in Singapore-based Viet Hydro Pte Limited, the majority owner of Lao Cai Renewable Energy JSC, the company that operates the plant. The transaction marks TEPCO’s first overseas hydro investment. Separately, InfraCo Asia Development Pte Limited has divested its 36.4 per cent interest in Viet Hydro to TEPCO.

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