Essar Power raises Rs 1,000 cr through bonds
Mumbai: As part of its plan to lower the debt service burden by replacing short-term debt with long-term borrowing, Essar Power has raised Rs 1,000 crore through an 11-year domestic bond sale.
The city-based company, which is a subsidiary of the London-listed Essar Energy, is offering a coupon of 12.5 per cent on the bonds, which will be listed on the BSE and will be repaid from 2017 to 2024.
The company had earlier said it would be replacing Rs 5,000 crore of its short-term debt with long-tenor borrowing, and the current sale is the second such attempt as it had already raised Rs 1,750 crore.
Essar Energy chief financial officer Deepak Maheshwari said, "The rupee bond issue will allow our power business to benefit from longer debt maturity time-frames and lower interest rates, compared to our existing debt facilities.
Essar Power has seven operational plants in the country and one in Algoma, Canada, with a total installed generation capacity of 3,910 MW. Last fiscal, Essar Power had completed a number of coal-fired power projects and its operational capacity will touch 6,700 MW shortly.
Essar Power has also access to around 500 million tonnes of coal resources across seven coal blocks in the country and overseas.