Adani Power restructures $1 bn debt to save cost

Gautam Adani promoted, Adani Power has raised Rs 4900 crores for investment in Kawai and Tiroda projects, sources working on the development said. This capital raising has two parts, refinancing Rs 3574 cr of existing debt to save cost of funds and external commercial borrowing (ECB) of $300 mn.

The refinancing has reduced the interest rate paid by Adani Power to 9.65% on rupee loan compared to 11.5% earlier. The ECB is raised at Libor+4 rate. Adani Power spokesperson declined to comment on the development.

Analysts say the restructuring of debt which has resulted in savings of around 200 basis points should boost to earnings per share (EPS) by 9%. This is a significant move for the company which is in a capital intensive sector like power.

Adani Power produces 660 MW of power at it’s Mundra project, sources say that another 300 MW is expected to go on stream by November this year. The company plans to set up a capacity of 6600 MW by FY13. The Kawai project in Rajasthan and Tiroda project in Maharashtra will produce 1320 MW of electricity each in the next 3 years.