Financial Briefs

India and overseas

 REC Limited raises Rs 11 billion through AAA-rated bonds (India)

REC Limited has raised about Rs 11 billion from its AAA-rated bonds. The bonds have a two-year seven-month maturity and carry an interest rate of 8.5 per cent  per annum, which is reportedly 15-25 basis points higher than the prevailing rate for bonds with best credit ratings. The higher rate is due to a combination of factors such as tighter liquidity, lower investor appetite and the high frequency of REC’s fund-raising.

GMR executes resolution plan for Rajahmundry power plant

GMR Infrastructure Limited has executed a bilateral resolution plan with the lenders of its 768 MW gas-based power plant in Rajahmundry in Andhra Pradesh. Under the resolution plan, approved by all 12 lenders to the project, the existing debt of Rs 23.53 billion has been brought down to a sustainable level of Rs 14.12 billion. The GMR Group has infused Rs 3.95 billion towards meeting 20 per cent of the principal for repayment of the sustainable debt and the interest servicing obligations of the project for the first year. Accordingly, the outstanding sustainable debt will be Rs 11.3 billion and will carry a floating rate of 9 per cent per annum, repayable over 20 years. The balance debt of Rs 9.41 billion has been converted into long-dated cumulative redeemable preference shares carrying a rate of 0.1 per cent, which is repayable from the 17th to the 20th year.

IndiGrid to acquire transmission assets from Sterlite Power

The India Grid Trust (IndiGrid), backed by Sterlite Power Grid Ventures, will acquire five electricity transmission assets worth Rs 115 billion ($1.66 billion) from Sterlite Power. The move comes after KKR and GIC recently announced funds infusion into IndiGrid. KKR and GIC have invested Rs 10.84 billion ($157 million) and Rs 9.8 billion ($142 million) to collectively acquire 42 per cent of IndiGrid’s outstanding units. With these acquisitions, IndiGrid’s portfolio will increase from six projects to 11 over the next two years and its assets under management will grow from Rs 53 billion to Rs 170 billion after completion of the entire transaction.

Japan’s Orix Corporation to buy the remaining stake in IL&FS’s wind assets

Japan-based Orix Corporation has expressed its intent to buy the remaining stake in the seven operational wind  plants belonging to Infrastructure Leasing and Financial Services (IL&FS), with a total generating capacity of 874 MW. At present, Orix owns 49 per cent stake in these assets. The intent to buy 51 per cent stake is in exercise of Orix’s right under the terms of an existing MoU where under Orix can match the price offered by the highest bidder for purchasing IWEL’s stake in the wind Special Purpose Vehicles. Previously, GAIL (India) Limited had emerged as the highest bidder, offering Rs 48 billion for 100 per cent of the enterprise value, implying no haircut.

APL withdraws offer for acquiring KSK Mahanadi

Adani Power Limited (APL) has withdrawn its offer to acquire the KSK Mahanadi project in Chhattisgarh. APL has cited the non-viability of the acquisition, as Uttar Pradesh Power Corporation Limited, with which KSK has a power purchase agreement to sell 1,000 MW of power, has decided to reduce tariffs for procurement of electricity by 32 paise per unit citing KSK’s inability to supply power. As of March 2018, KSK Mahanadi had defaulted on bank loans worth Rs 217.6 billion and the company will be referred to the National Company Law Tribunal for debt resolution.

Torrent Power raises Rs 2.7 billion from NCDs on a private placement basis

Torrent Power Limited has raised Rs 2.7 billion through the issue of non-convertible debentures (NCDs) on a private placement basis. A total of 27,000 NCDs of Rs 100 million each have been issued by the company at a coupon rate of 10.25 per cent per annum. In case of default in payment of interest and/or principal redemption on due dates, Torrent Power will pay additional interest at the rate of 2 per cent per annum over the coupon rate for the defaulting period.

CPPIB signs MoU with PEL for $600 million renewable energy trust

The Canada Pension Plan Investment Board (CPPIB) has signed an MoU with Piramal Enterprises Limited (PEL) to form a $600 million renewable energy trust. The newly formed infrastructure investment trust will seek to acquire 1.5-2 GW of stable and cash generating renewable assets comprising both wind and solar in India. The projects will be developed on a hold-to-maturity basis, with a focus on diversification of both types of assets as well as offtaker profiles. PEL and the CPPIB will act as co-sponsors of the proposed trust and hold up to 75 per cent of the units, with the CPPIB committing $360 million and holding up to 60 per cent and PEL committing $90 million and holding up to 15 per cent. It will seek to raise capital from other investors for the remaining 25 per cent stake.ADB to fund Indonesia’s largest combined cycle power plant (Indonesia)

The Asian Development Bank (ADB) will provide $305 million for Jawa-1, Indonesia’s largest combined cycle gas turbine (CCGT) power plant. The financing package comprises a direct loan of $185 million and a parallel loan of $120 million, provided by the Leading Asia Private Infrastructure Fund, which is administered by ADB. The project includes a 1,760 MW CCGT power plant and ancillary infrastructure in Cilamaya, Karawang, West Java.


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