Comments
Reliance Power Ltd (RPower) has once again approached Power Finance Corporation Ltd (PFC) for loans totalling Rs 5,000 crore for its two projects — Samalkot (Andhra Pradesh) and Tato-II (Arunachal Pradesh).
The Anil Ambani group company has sought Rs 2,500 crore for the 2,400-MW Samalkot gas-based station and Rs 2,584 crore for the 700-MW Tato-II hydro power project.
“The Tato-II case was discussed by PFC Board on November 8, while the one for Samalkot is under examination,” an official privy to the development told Business Line .
But no final decision has been made till now, he added.
RPower had, in the past, too, approached PFC for funding for the Samalkot project. But for want of a bank guarantee it was not accepted. PFC had asked RPower to furnish a bank guarantee, as there was uncertainty over availability of domestic natural gas.
“Reliance Power did not give the bank guarantee at that time,” the official added.
Pooling mechanism
Though the situation as far as availability of gas is concerned has not changed much, PFC is still considering the loan request, as RPower has cited the Government’s initiative to make gas available through pooling mechanism for power projects that are stalled.
The company has also requested the Power Ministry for its support while seeking these loans.
“No special dispensation will be given while considering their request. Every lender will appraise the project and fund it based on commercially viable decisions,” a senior Power Ministry official told Business Line .
RPower did not respond to Business Line’s queries seeking details on the loan applications.
The Samalkot power station will cost nearly Rs 11,000 crore. Of this, Rs 3,300 crore will be equity funding and the remaining Rs 7,700 crore will be debt. Till now, RPower has tied up loans of about Rs 3,000 crore.
The Tato-II hydro project would cost about Rs 7,400 crore, comprising Rs 2,200 of equity and the balance in debt.
Consolidated debt
“Reliance Power has a consolidated debt of Rs 27,000 crore as of March 2013. The company has a net debt-equity ratio of 1.3, while gross debt-equity ratio of 1.5,” said Rupa Shah, Research Analyst (Institutional Equities) at Prabhudas Lilladher Pvt Ltd.
“Till net debt-equity ratio of 1.5 is reached, not much concern would be raised,” Shah added.
It is believed that RPower is also seeking loans of more than Rs 4,500 crore from Rural Electrification Corporation.
However, this information could not be verified.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.