Financial Briefs: India and overseas

India and overseas

 PFC raises $1 billion in the international market (India)

Power Finance Corporation (PFC) has raised $1 billion through Reg-S bonds in the international market. The transaction was carried out in two tranches – a five-year tranche for $400 million at 3.87 per cent at a re-offer spread of 195 basis points over five-year US Treasury (UST) rates and a 10-year tranche for $600 million at 4.57 per cent at a re-offer spread of 242.5 basis points over 10-year UST rates. The bond sale received a demand for about $5 billion, against which the company retained only the targeted sum.

CGPL raises Rs 11.1 billion through NCDs on a private placement basis

Tata Power’s wholly owned subsidiary, Coastal Gujarat Power Limited (CGPL), has raised Rs 11.1 billion through the issuance of non-convertible debentures (NCDs) on a private placement basis. The NCDs will be issued in three series of Rs 3.7 billion each and will carry a coupon rate of 9.15 per cent, payable annually. The proceeds will be used for CGPL’s corporate purposes, including refinancing existing debt, capital expenditure and augmentation of working capital.

NCLT rejects EPJL’s insolvency bid

The National Company Law Tribunal (NCLT) has rejected a Rs 12 billion offer by the former promoters of Essar Power Jharkhand Limited (EPJL) for a one-time settlement against a total debt of about Rs 56 billion. The bid was declined by ICICI Bank, which is the lead lender and has 99.34 per cent voting rights. The promoters had earlier offered Rs 9 billion. EPJL, a step-down subsidiary of Essar Power, is setting up a 1,200 MW coal-based power plant in Latehar district of Jharkhand, which is 45 per cent complete.

Greenko raises $495 million for two storage projects

Greenko Energy Holdings has signed definitive agreements for primary equity totalling $495 million from an affiliate of GIC and a wholly owned entity of the Abu Dhabi Investment Authority. The company will utilise the proceeds for its two upcoming storage projects, each of 1.2 GW capacity, at Pinnapuram and Saundatti in Andhra Pradesh and Karnataka respectively. These projects entail an overall capital outlay of $2 billion and are expected to be commissioned in 2022.

Brookfield likely to acquire majority stake in Suzlon Energy

Suzlon Energy has offered a one-time settlement proposal to its lenders that entails potential majority stake sale to Canadian investor, Brookfield. The move will infuse additional equity in the company and also help waive a considerable amount of debt from lenders including foreign currency convertible bondholders. Reportedly, Suzlon plans to reportedly close the deal in three to six months.

Sekura Energy completes the acquisition of EIL’s transmission assets

Sekura Energy Limited, owned by the Edelweiss Infrastructure Yield Plus Fund, has completed the acquisition of Essel Infraprojects Limited’s (EIL) two transmission assets. The projects acquired are Darbhanga-Motihari Transmission Limited and Northern Region Strengthening Scheme (NRSS) XXXI (B) Transmission Limited. EIL had entered into an agreement to sell the two transmission assets to Sekura Energy in October 2018. The agreement also gave Sekura the right to purchase two other transmission assets owned by EIL – Warora-Kurnool Transmission Limited and NRSS XXXVI Transmission Limited, which are expected to be commissioned in the year 2019-20. These projects are likely to be acquired post-commissioning.

SEFA approves a $995,000 grant for investment in renewables in Ethiopia (Ethiopia)

The Sustainable Energy Fund for Africa (SEFA), managed by the African Development Bank, has approved a $995,000 grant to support the roll-out of a sustainable procurement framework for independent power producers (IPPs) in Ethiopia. The SEFA grant is intended to encourage private investments in hydropower projects through Ethiopia’s Renewable Energy Programme.

Mexico’s El Paso to be acquired by IIF for $2.78 billion (Mexico)

New Mexico’s utility El Paso Electric will be acquired by the Infrastructure Investments Fund (IIF) for $2.78 billion in an all-cash deal, advised by J.P. Morgan Investment Management. IIF will pay $68.25 for each share of El Paso Electric. The deal for El Paso provides electricity to about 428,000 customers in the Rio Grande valley in west Texas and southern New Mexico. The deal is worth $4.3 billion, including debt.

 J-POWER buys stake in Genex Power’s 250 MW pumped storage plant (Australia)

Genex Power Limited has signed a share subscription agreement (SSA) with Electric Power Development Company Limited, trading as J-POWER, for a conditional investment of up to $17.5 million. The investment will be made by way of a subscription for ordinary shares in Genex, with the proceeds to be principally applied towards Genex’s equity funding component for construction of the 250 MW Kidston Pumped Storage Hydro Project (K2-Hydro). As a further condition precedent under the SSA, Genex has agreed to enter into a technical service agreement with J-POWER, wherein the latter will provide professional technical advisory services to Genex in relation to the development as well as operational stages of the K2-Hydro project.