Financial Daily from THE HINDU group of publications
Wednesday, May 31, 2006
Financial Daily from THE HINDU group of publications Wednesday, May 31, 2006 |
|
|
|
|
|
|
|
Corporate
-
Mergers & Acquisitions Lanco picks up 74 pc in Nagarjuna Power Plant Our Bureau
Power play Nagarjuna group to have 26 pc stake Project to have the commercial operating date by 2009 The project is the first independent power projectin the country to operate on imported coal
Hyderabad , May 30 The Hyderabad-based Rs 2,500-crore Lanco Group has picked up a 74 per cent stake in the Rs 4,300-crore, 1,015-MW, coal-fired, Nagarjuna Power Plant at Mangalore in Karnataka. According to the agreement signed by Mr K.S. Raju, Chairman of the Nagarjuna group, and Mr L. Madhusudhan Rao, Chairman of Lanco Group, here on Monday, the former will have a 26 per cent stake and the project will be jointly developed, a company press release said here on Tuesday. Mr Rao told Business Line that the project is scheduled to achieve financial closure by September 2006 and will have the commercial operating date by 2009. He said the company's equity structure would be changed and aligned to the current-day coal-based thermal projects. The project is the first independent power project in the country to operate on imported coal. It would go a long way in meeting the power requirements of Karnataka, which faces acute power shortage, the release added. The company has signed a power purchase agreement with the five ESCOMs in Karnataka for the off-take of 90 per cent of power from the project. It has already acquired various approvals, including the clearance from the Ministry of Environment and Forests. The Centre has already accorded it a `Mega power project' status. Lanco is one of the largest independent power projects and is implementing more than 2,000 MW of power projects — both in thermal and hydro. The group is also into infrastructure development. Nagarjuna Group, in addition to power, is into fertilisers, agriculture, and oil and gas. C. Shivkumar reports from Bangalore: This acquisition should allow the power project to attain full financial closure shortly. The deadline for the financial closure fixed by the Central Electricity Regulatory Commission is June 30, with the capital cost frozen at Rs 4,299.12 crore. NPCL could thus become the first private sector mega power project to reach this milestone. NPCL has already signed a power purchase agreement (PPA) with five electricity supply companies (ESComs) in Karnataka and with the Kerala State Electricity Board for 100 MW. The PPAs with the ESComs provide for a return on equity of 14 per cent on the basis of 80 per cent plant load factor (PLF). The lead arranger Power Finance Corporation (PFC) has already cleared the debt-financing package for the project. The project is being funded through a debt equity ratio of 70:30. Accordingly the debt-financing package is estimated at Rs 3,010 crore. The project carries a three-tier package that is meant to provide security to lenders. Theseinclude a letter of credit, an escrow cover up to 1.25 times the outstanding billing and State Government guarantee subject to ceiling of Rs 400 crore. PFC's funding is for 12 years. The interest rate at the time of clearing the project debt package was 7.25 per cent, though this was now likely to move up, slightly. The project has already attained some key milestones. These include finalising the public sector BHEL as the Engineering Procurement and Construction (EPC) Contractor. The EPC component is expected to cost at least Rs 2,500 crore and the civil works another Rs 980 crore. Besides, NPCL has also entered into a long-term arrangement with Rio Tinto of Australia for supply of coal with a calorific value of 6200 Kilocalories per kilogram. The first unit of the project of 507.5 MW is estimated to be commissioned within 38 months after full financial closure and the second units four months or in mid 2009. The first year tariff is estimated at around Rs 2 a unit when commissioned.
More Stories on : Mergers & Acquisitions | Power
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|