Caparo Energy obtains first phase of financing

20th Jun 2011 15:01

Caparo Energy has today disclosed that it has obtained a first round of financing, for Rs 3,500m (US$78.5m), from the India Infrastructure Fund. The mezzanine debt takes the form of preference shares with a six year term. Of note, the company has highlighted the non-dilutive nature of these preference shares. Also to be had in account, the firm expects that in the next few weeks it will finalize negotiations on a second round of financing for an additional US$33.5m in mezzanine finance on similar terms. 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.Caparo has also announced that it has reached agreement with Suzlon Energy, apparently its main supplier, 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, by March 2013. Over half of the resulting orders are expected to be placed ahead of schedule.The company´s portfolio of projects with Suzlon now stands at 850 MW and management says that it is confident of meeting its target of 1GW by March 2013. The firm´s chief executive officer, Ravi Kailas, has indicated that, "With India's 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."Shares of Caparo closed flat today, at 115p, in London trading. AB