No cap on bank lending to sector, RBI says

The Reserve Bank of India has not mandated any sectoral exposure limits on banks, and hence, banks should not say that having hit the limit for the power sector they are unable to lend to the renewable power sector. Banks may have their own internal sectoral exposure limits, but the RBI has not imposed any such limits, according to Dr K.C. Chakrabarty, Deputy Governor.

It is however true that the RBI stipulates lending limits with respect to borrowing entities, but there is nothing sector-wise, he said.

Dr Chakrabarty said in response to a query that players in the renewable-energy industry are finding it difficult to raise loans because banks say they have exhausted their ‘limits' by lending to thermal power projects.

Hearing on winding up petition against Indowind

The National Stock Exchange-listed Indowind Energy is facing some headwinds as a bondholder has filed a winding-up petition against the company with the Madras High Court. The hearing on the case has just got underway.

Indowind Energy, which owns and operates wind farms, had raised $30 million through an issue of foreign currency convertible bonds in December 2007 that paid step-up interest rate of 2.5 per cent semi-annually, increasing to 7.32 per cent by June last year (based on share price remaining lower than the floor price of Rs 167.11). 

However, the company defaulted on interest payments starting December 2009 and has already missed five subsequent payments. The Bank of New York Mellon has filed a winding-up petition against Indowind. In November, the petitioner obtained an order restraining Indowind from selling its assets.

The company maintains that it has had the dues restructured, but the court refused to accept it. Noting that one bondholder, QVT Fund LP of Singapore, which holds 45 per cent of the bonds issued, has rejected the offer of restructure, the order said that Indowind had been “taking a prevaricating stand about the restructure of the bonds.” Sources said that QVT is owed about Rs 200 crore.

There is no mention of the November 2011 court order among the corporate announcements of Indowind on the exchange Web site.

L&T to double EPC business

With orders of 80 MW on hand, L&T is confident of undertaking engineering, procurement and construction (EPC) contracts for building 200 MW of solar photovoltaic installations in 2012-13, a senior official of the company said. L&T Solar Ltd, a division of the engineering, construction and contracts business, will end the current year with 112 MW.

About 40 MW of that is still under execution and will be completed by the end of this month, the source said. The solar EPC division of the company has 200 engineers and recruitment is happening as “an ongoing exercise.” Sources said that that the company is close to recruiting an expat expert. “We are looking at opportunities in the solar-thermal area as well,” the source said.

mramesh

@thehindu.co.in

(This article was published in the Business Line print edition dated March 3, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.