Essar Power raises Rs 750 crore via bond sale

Mumbai: Essar Power has completed an 11 year, Rs 750 crore (~$125 million), rupee denominated bond offering, the company said in a statement on Wednesday.

This is the second of a number of Rupee bonds to be offered by Essar Power, which when completed will total Rs 5000 crore (~.$850 million). The proceeds will be used to make repayments on existing loan facilities within the power business, particularly relating to its new coal fired power projects. Essar Power was assigned a credit rating of A+ by ratings agency Credit Analysis and Research Ltd ( CARE), of Mumbai, in October 2012 in respect of the proposed Rs.5,000 crore bond issue.

The new bonds issued will be listed on the Bombay Stock Exchange and will be repaid from 2022 to 2024. However, it is currently intended that this bond issue will be refinanced with a Rs.3,000 crore (~US$500 million) credit enhanced Rupee bond issue in due course.

During FY2013 Essar Power completed a number of coal-fired power projects and now has 3,910 megawatts of operational capacity. Work is progressing on further projects intended to take Essar Power’s operational portfolio to 6,700MW.

Deepak Maheshwari, Essar Energy chief financial officer, said: “This bond issue will allow our power business to benefit from longer debt maturity timeframes and lower interest rates compared to our existing debt facilities. Essar Energy is well positioned to capitalise on the growing demand for power in India.”