🕐20.06.11 - 08:27 Uhr
CAPARO ENERGY LTD (CEL.L)- TRADING UPDATE
Please find attached and below a copy of Caparo Energy Ltds Trading
Update released today.
Best,
Philippe
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN
OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN
Press Release
20 June 2011
Caparo Energy Limited
("Caparo Energy" or the "Company")
Caparo Energy secures first tranche of Mezzanine
Trading update
The board of directors of Caparo Energy (the "Board") is pleased to
announce a number of important developments in connection with the
Companys financing and operations:
Highlights:
* Secured US$78.5m of Mezzanine finance without equity dilution
* In advanced stage of negotiations for an additional US$33.5m
mezzanine finance on similar terms
* Following the commitment of the second tranche of finance, the
Company believes it will have sufficient funds for the development of
approximately 700 MW of wind projects
* First 10.5 MW in Rajasthan connected to the grid and revenue
generating with a further 31.5 MW to be connected by mid-July 2011
* Agreement with Suzlon on sites for further 750 MW to be
delivered by March 2013, of which 400 MW of orders, due for delivery by
March 2012, are expected to be placed ahead of schedule
Mezzanine Financing
Further to the Companys announcement on 17 May 2011, relating to the
advanced discussions regarding the provision of mezzanine financing, the
Company is pleased to announce that Caparo Energy (India) Limited
("CEIL"), the Companys wholly owned subsidiary, has secured a first
tranche of US$78.5m of this funding.
This first tranche of mezzanine
financing, which is in the form of preference shares with a six year
term, of Rs.
3,500m (US$78.5m) is being provided by The India
Infrastructure Fund, managed by IDFC Project Equity Company Limited.
Morgan Stanley acted as a sole advisor to CEIL on this transaction.
The second tranche of this funding, which is expected to be Rs.
1,500m
(US$33.5m), is at an advanced stage of discussion and a firm commitment
in respect of this second tranche is expected to be finalised in the
next few weeks.
The terms of both these tranches of financing entail no equity dilution
for Caparo Energys existing shareholders and the Directors believe that
this will result in enhanced equity returns for investors.
The Company
expects to repay the preference shares from internal cash-flows, the
issue of senior debt instruments, bonds or other debt refinancing,
within a time period of 3-5 years.
The Board believes that securing this financing is a significant step
forward for the business and further believes that it is the first time
that an Independent Power Producer ("IPP") in the wind sector in India
has been able to arrange this type of financing.
The Board anticipates
that this additional Rs 5,000 (US$112m) of non-dilutive financing, along
with the Companys existing resources, would enable the Company to
develop approximately 700 MW of wind projects.
First project begins commissioning
The Companys first project, totalling 42 MW and comprising 20 Suzlon
S-88 2.1 MW wind turbine generators ("WTG"), has begun commissioning in
Tejwa (Mokal), Rajasthan ("Project 1").
An initial five WTGs, totalling
10.5 MW, are currently connected to the grid and the Company expects a
total of 42 MW will be fully connected by mid-July 2011.
The Mokal site
is currently considered by the Board to be one of the best sites
available in Rajasthan and has an overall potential for over 400 MW.
In relation to Project 1, the Company has entered into a 20 year Power
Purchase Agreement ("PPA") with the Rajasthan State Electricity Board
for the sale of power generated by the 20 WTGs at a rate of Rs.
4.22 per
kWh.
This newly notified price represents an increase of Rs.
0.39 per
kWh, equivalent to approximately 10% above last years tariff.
Project
1 will also receive an additional incentive of 4% over and above the
energy tariff, resulting in a net tariff of Rs.
4.39 per kWh.
Furthermore, Project 1 is eligible for approval under the Generation
Base Incentive Scheme to earn an additional Rs.
0.50 per kWh.
The Board
also expects the Company to receive revenues through CER credits.
The Companys second project is approaching completion in Mahidad,
Gujarat, and comprises 12 Suzlon S-88 2.1 MW WTGs, totalling 25.2 MW.
The Company expects that the 12 WTGs will begin commissioning in July
2011 and will be fully completed by mid-August 2011.
The Company
believes that the Mahidad site has an extremely favourable wind profile,
as independent studies undertaken by internationally recognised firms in
this field have reported that the expected Plant Load Factors ("PLF")
for this site are in excess of 30%, (at the top end of the industry
averages of 25-30%).
The Companys third project in Maharashtra comprising 16 Suzlon S-88 2.1
MW WTGs and totalling 33.6 MW is progressing according to schedule and
is expected to be completed by December 2011.
All of the sites under construction are fully permitted and have
detailed wind data collected over a period of over four years, using
site based met masts and with measurements at different heights.
Future project sites
The Company also announces that in addition to the first 100 MW detailed
above, it has agreed with Suzlon Energy Limited ("Suzlon") on the
locations for the next 750 MW of projects that are to be delivered under
the existing BPA, fully commissioned and connected to the grid in stages
by March 2013, 400 MW of which are expected to be commissioned and
connected to the grid by March 2012.
The Board expects that the purchase
orders for these sites, being funded by the mezzanine finance, will be
issued ahead of the original schedule and that the Company will have a
total of 500 MW fully operational and connected to the grid by March
2012.
The 750 MW comprises five individual projects located in the states of
Gujarat (300 MW), Andhra Pradesh (100 MW), Maharashtra (100 MW),
Rajasthan (75 MW), Karnataka (100 MW) and Tamil Nadu (75 MW).
All of
these sites have wind data using a met mast measured at different
heights for an average period of over four years and are fully
permitted.
The Company has selected these sites based on detailed analysis and
independent wind studies completed by internationally recognised firms
in this field, and the Board is confident that these projects represent
some of the best sites being commissioned in India over the next two
years and that the PLFs for these sites are very attractive.
The Company anticipates reaching an agreement with Suzlon with respect
to a further 150 MW of projects for delivery by March 2013, thereby
achieving the full 1 GW with Suzlon by March 2013 under the terms of the
BPA.
In addition and further to the Companys announcement on 17 May 2011,
the Company now has 150 MW in development with Gamesa Wind Turbines PVT
LTD, which will be commissioned on sites totalling 3 GW secured by the
Company, as referred to in the previously released announcement.
The
Company believes that these sites can be fully developed by 2016 and
have indicative PLFs of higher than 28%, based on preliminary analysis
by internationally reputed consultants.
Ravi Kailas, Caparo Energys Chief Executive Officer, commented:
"The commissioning of the first projects and the securing of mezzanine
financing are two extremely important milestones, both of which the
Company achieved ahead of a very tight schedule.
This financing,
together with the second tranche expected to be secured shortly, puts
the Company in a position to fund approximately 700 MW of projects, with
no further equity dilution to the existing shareholders and we extend a
warm welcome our new investors.
"Caparo Energys strong relationship with Suzlon has also enabled us to
identify an attractive portfolio of additional wind projects totalling
750 MW for delivery by March 2013.
This takes our portfolio of projects
with Sulzon to 850 MW and we are confident that we will meet our target
1GW by March 2013.
"With Indias continued power deficit and the increased price of coal,
wind power is rapidly becoming a cost effective and mainstream source of
power and Caparo Energy is well positioned to lead this transformation
which is taking place in the Indian power infrastructure."
Further information on the Company can be found at www.caparoenergy.com.
- Ends -
Philippe Polman
Account Manager
Direct line: +44 (0)20 7861 3921
Mobile: +44 (0)7841 672 830
Pelham Bell Pottinger
5th Floor, Holborn Gate, 330 High Holborn, London, WC1V 7QD
Tel: +44 (0)20 7861 3232 Fax: +44 (0)20 7861 3233
www.pelhambellpottinger.co.uk
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A CarbonNeutral(r) company