Financial Briefs

India and overseas

PFC raises $300 million through syndicated borrowing (India)

The Power Finance Corporation (PFC) has raised $300 million through a three-year syndicated loan from the State Bank of India, Hong Kong, and MUFG Bank Limited, Singapore. This is PFC’s second foreign currency borrowing in the April-June 2019 quarter. Earlier, PFC had raised $1 billion through the issuance of Reg-S bonds, the biggest bond issuance overseas by a government-owned non-banking financial company. With the current $300 million loan, PFC has mobilised a total of $1.3 billion in 2019-20.

Schneider receives CCI approval to acquire Larsen & Toubro’s electric and automation business

The Competition Commission of India (CCI) has approved the acquisition of Larsen & Toubro’s (L&T) electric and automation (E&A) business by Schneider Electric India and MacRitchie Investments. The approval is subject to modifications that are aimed at eliminating the likely anti-competitive effects of the proposed acquisition. The commission stated that the acquisition would reduce competition and give the combined entity the ability to increase prices. The deal is reportedly valued at Rs 140 billion. The two companies entered into a business transfer agreement for the acquisition in May 2018.

KPTL to sell stake in power transmission assets to CLP India

Kalpataru Power Transmission Limited (KPTL) has entered into a binding agreement with CLP India Private Limited to sell its stake in three power transmission assets for an enterprise value of Rs 32.75 billion. These assets include Kalpataru Satpura Transco Private Limited, Alipurduar Transmission Limited (ATL) and Kohima Mariani Transmission Limited (KMTL). The transaction for ATL and KMTL will be effective after the commissioning of these projects and the fulfilment of due diligence of elements that are yet to be commissioned. The transaction marks CLP’s entry into the power transmission sector.

CGPL raises Rs 11.1 billion through the issuance of NCDs

Tata Power’s arm, 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 carry a coupon rate of 9.15 per cent, payable annually. The NCDs will be issued in three series of Rs 3.7 billion each. The proceeds from this will be utilised for general corporate purposes, including refinancing of existing debt, capital expenditure, and augmentation of working capital.

ReNew Power raises $300 million through a rights issue

ReNew Power has raised $300 million through a rights issue of compulsorily convertible preference shares, which will be converted into equity during later stages. Goldman Sachs, the Abu Dhabi Investment Authority, and the Canada Pension Plan Investment Board have subscribed to the issue with each of the shareholders infusing $100 million into it. The proceeds of the rights issue will be used primarily towards capital expenditure for the company’s existing pipeline of projects.

RPower restructures loan worth Rs 24.3 billion for Samalkot project

Reliance Power Limited’s (RPower) loan of Rs 24.3 billion from the Export– Import Bank of the United States (US-EXIM) for the Samalkot gas-based project has been restructured and the maturity extended to June 2022. The mortising repayment schedule has been converted into bullet repayments with an interest rate of 2.65 per cent per annum. The company is currently at advanced stages of development of a 750 MW combined cycle power project and liquefied natural gas terminal in Bangladesh and relocation of the Samalkot modules in Andhra Pradesh to Bangladesh.

Uzbekistan to provide $45 million loan for 500 kV power transmission project (Uzbekistan)

Uzbekistan will provide $45 million to Afghanistan for the implementation of a 500 kV transmission line from Surkhandarya (Uzbekistan) to Pul-e-Khumri (Afghanistan). Of the total estimated line length of 260 km, 45 km will lie in the former’s territory and 215 km in the latter’s. The transmission line will augment electricity supply to 6 billion kWh per year. The total cost of construction of the line is estimated to be $115 million, of which the Asian Development Bank will provide $70 million. The two countries plan to sign a 10-year contract by end October 2019 for power trade on a take-or-pay basis.

China’s Datang Group files for liquidation of the Liancheng power plant (China)

China’s biggest power generator, the Datang Group has filed an application for bankruptcy and liquidation of the Liancheng power plant and made a declaration on insolvency of the firm for the settlement of outstanding debt. The Datang International Power Generation Liancheng power plant in Gansu has a total installed capacity of 660 MW, total assets of about $86.54 billion and $260 million of debt as of end May. Earlier, its subsidiary in north-western Gansu province, which operates a coal-fired power station, had applied for bankruptcy and liquidation after defaulting on approximately $2.39 million of debt.

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