CARE downgrades GVK Power to 'BBB+'...

 

Credit Analysis & Research (CARE) has downgraded the long-term bank facilities rating of GVK Power & Infrastructure from 'A-' to 'BBB+' aggregating to Rs 4.25 billion.

CARE has also downgraded the long/ short-term bank facilities rating from 'A-/ A2' to 'BBB+/ A3+' aggregating to Rs 1.20 billion (reduced from Rs 2 billion) of the company.

The revision in the ratings of GVK Power and Infrastructure (GVKPIL) takes into consideration deterioration in financial performance of the company during FY13 (FY refers to the period April 1 to March 31) and H1FY14, decline in operating performance of gas based power plants of the group, deterioration in capital structure of the company and delay in execution of projects under implementation in the hydro and thermal energy segments.

The ratings continue to derive strength from the experience of the promoters and management team, track record of successful execution of projects, well-diversified portfolio of assets under operation and development and long term growth prospects for the infrastructure sector.

The ratings, however, continue to be constrained by high investment commitments of subsidiaries and step down subsidiaries, inherent risk associated with development of greenfield infrastructure projects and exposure to the subsidiaries and other group companies in the form of corporate guarantees.

The ability of the company to raise funds in a timely manner, improve capital structure and meet equity commitments of group companies, as per the schedule without any further deterioration in the financial risk profile are the key rating sensitivities.

Shares of the company declined Rs 0.03, or 0.36%, to settle at Rs 8.25. The total volume of shares traded was 1,096,235 at the BSE (Friday).

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Implementation of TRAI Recommendation for Green Telecom...

 

In response to Telecom Regulatory Authority of India (TRAI) recommendations dated 12.04.2011, Department of Telecommunications (DoT) decided to adopt measures to green the Telecommunications sector and issued directions for implementation of green technology on 23.01.2012.

Giving this information in written reply to a question in the Rajya Sabha today, Shri Kapil Sibal, Minister of Communications and Information Technology, said that to examine the Technical feasibility and financial viability, DoT undertook 20 Pilot projects in USOF Ph.-I sites using Green Energy (SPV & SPV-wind hybrid) with support from Universal Service Obligation Fund (USOF) and Ministry of New and Renewable Energy (MNRE).

Based on the outcome of these pilots, MNRE further extended subsidy support to Telecom operators for carrying out 400 RET projects. The Telecom Industry has executed RET projects on RESCO (Renewable Energy Service Company) model. Approximately 2500 mobile towers are working on Renewable Energy Technology.

A committee consisting of officers from DoT & Ministry of New and Renewable Energy (MNRE), RESCO and Telecom Industry representatives have been constituted on 25th March, 2013 to facilitate increased use of alternative sources (Renewable Energy Technologies) for powering Telecom networks, develop sector specific schemes for promotion of green technologies and propose a program for deployment Renewable Energy option in the Telecom Sector.

Shri Kapil Sibal informed the House that at present there is no scheme for providing financial support to the telecom operators for meeting the Green Energy targets.

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SBI warns of Dhabol power project becoming an NPA...

 

Warning that the Ratnagiri Gas and Power Private Limited (RGPPL) 1979 MW Dhabol power project was on the verge of becoming a non-performing asset (NPA) and the public and private sector banks could stand to lose an exposure of Rs. 9000 crore, State Bank of India (SBI) chairperson, Arundhati Bhattacharya has sought government intervention to save the situation from turning grim by allocating adequate gas to RGPPL to ensure its smooth operations.

Earlier, ICICI bank had informed the government that RGPPL, popularly known as Dhabol power project was turning into a NPA due to failure of the government to allocate adequate gas.

In a letter to the Power Secretar, P.K. Sinha, the SBI chairperson has pointed out that RGPPL has not been able to service interest for August, September, and October 203 and the instalment for the quartering ending September 30 due to the lenders. “The account if on the verge of becoming an NPA if interest for August 2013 is not serviced on or before November 29,” the letter states.

Further it has pointed out that the exposure of public sector lenders, currently about Rs. 8500 crore (SBI’s share is Rs. 1752 crore), was restructured once in 2009 under the guidance of Ministry of Power due to delay in implementation of the project. The company has no funds to meet repayment commitments and the company is on the verge of default in meeting repayment commitments because of stalled operations due to non-availability of fuel. This would result in slippage of asset quality, which would be a setback for the lenders despite their sacrifice through waivers and concessions in reviving the project, it added.

Ms. Bhattacharya said as against 8.5 mmscmd of gas requirement, there has been no supply for the last four months and the supply of 0.9 mmscmd from GAIL India as and when gas is available is not sufficient to run even one out of the six gas turbines at technical minimum operating parameters. “We request you to use your good offices in ensuring adequate supply of gas for the project to enable the power plant to run without interruption to protect the interests of all the stakeholders. We request you to take up with Power Ministry and the Government of Maharashtra for payment of dues to RGPPL immediately so that the company would be able to meet its repayment commitment to the lenders in time to tide over the crisis,” the letter states.

The current plant load factor (PLF) of Dhabol project has fallen to 29 per cent much lower than 45 per cent in April and 38 per cent in May this year. For RGPPL to achieve break even and service its current debt obligations, it has to operate at a PLF of 69 per cent during 2013-14 and 79 per cent in 2014-15.

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CCI clears merger of Alstom, Kalyani Group joint venture firms...

 

The fair-trade regulator has approved the proposed merger of two companies jointly owned by French major Alstom and industrial player Kalyani Group, saying the deal will not adversely affect competition.

The transaction involves the absorption of Kalyani Alstom Power into Alstom Bharat Forge Power, which will be the surviving company.

Both entities are jointly controlled by Alstom Power Holdings SA and Bharat Forge Ltd, the flagship firm of the Kalyani Group.

The Competition Commission of India (CCI) said in a December 10 order that "the proposed combination is not likely to have appreciable adverse effect on competition in India."

The regulator observed that after the deal, ultimate control over Alstom Bharat Forge Power would remain jointly with Alstom Power Holdings and Bharat Forge.

Alstom holds a 51 per cent stake in Alstom Bharat Forge Power, a maker of steam turbines and generators, while the rest is with Bharat Forge.

Bharat Forge has a 51 per cent stake in Kalyani Alstom Power, with the remainder held by Alstom. Kalyani Alstom makes heat exchangers and auxiliary equipment for steam turbine generators.

The Commission noted there was "no horizontal overlap" between the business activities of the two companies.

"The products of ABFPL (Alstom Bharat Forge Power Ltd) and KAPL (Kalyani Alstom Power Ltd) would be complementary to each other for the setting up of turbine islands for sub-critical and super-critical technology based power plants," the regulator said.

"However, KAPL has not started any business activity and has also stopped construction of its manufacturing plant and ABFPL has also not supplied any products to KAPL," it added.

Besides, Alstom Bharat Forge Power's manufacturiing plant and ABFPL has also not supplied any products to KAPL," it added.

Besides, Alstom Bharat Forge Power's manufacturing facility is scheduled to start in 2015, the CCI noted.

The boards of both companies approved the merger in October, following which the CCI's clearance was sought.

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Govt to Raise Rs 2,000 Cr from NHPC Disinvestment...

 

Government expects to raise about Rs 2,000 crore through disinvestment of state-run hydro power producer NHPC, Parliament was informed today.

"The Government of India is likely to realise an amount of approximately Rs 2,000 crore from NHPC buyback offer," Minister of State for Finance J D Seelam said in a written reply to the Lok Sabha.

The board of the state-run company has approved buying back of 10 per cent of total shares or over 123 crore shares on a proportionate basis from shareholders, at a price of Rs 19.25 apiece.

The government holds 86.36 per cent stake in NHPC. Seelam said the Empowered Group of Ministers (EGoM) on disinvestment has decided to tender shares up to the size of the buyback proposed by the company.

The buyback which opened on November 29 closed on December 12. The entire process would be completed by January 7, 2014, Seelam said.

Under the buyback mode, the government can raise money by selling its equity in the company to the PSU itself.

The government aims to raise Rs 40,000 crore through PSU disinvestment in the current fiscal. So far this fiscal, it has managed to garner about Rs 3,000 crore through PSU stakesale.

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Atomic regulators meet discusses Russian VVER reactors...

 

The 20th meeting of the VVER (Russian atomic reactor) Regulators Forum hosted by India for the first time concluded Friday at Kanyakumari, said a senior Atomic Energy Regulatory Board (AERB) official.

The forum was founded in 1993 and consists of atomic regulators from various countries where the Russian designed VVER nuclear reactors operate or are being set up.

India's atomic power company Nuclear Power Corporation of India Ltd (NPCIL) is setting up two VVER reactors of 1,000 MW capacity at Kudankulam in Tirunelveli district, around 650 km from here.

The three-day meeting began Dec 11 and concluded Friday.

"Regulators who attended the conference submitted a report on the VVER reactors in their countries. India too submitted its report. The reports are not public. The reports basically deal with policy related aspects," AERB Secretary R. Bhattacharya told IANS over phone from Kanyakumari.

He said the forum also discussed the additional safety measures taken after the nuclear accident that happened in Fukushima in Japan.

The forum was attended by 14 foreign delegates and chaired by AERB Chairman S.S. Bajaj.

The forum consists of nuclear regulatory organisations from Armenia, Bulgaria, China, Czech Republic, Finland, Hungary, Iran, Russian Federation, Slovakia, Ukraine and India.

Speaking about the first unit at Kudankulam that has started power generation, Bhattacharya said the unit is working well.

"There are no reactor safety related issues. There was some issue with the secondary equipment which has been sorted out," Bhattacharya said.

Permission to generate power up to 50 percent (500 MW) of the rated capacity has been given August 2013 which is valid till Jan, 2014.

He said Finland has expressed its wish to host the next meeting of the VVER Regulators Forum and a decision on it will be taken later.

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Ten hydel projects of 8,531 MW awaiting various clearances...

 

Ten hydro-electric projects (HEPs) of NHPC Ltd with an aggregate installed capacity of 8531 MW, which have been concurred by Central Electricity authority (CEA), are awaiting various other clearances such as Environment & Forest clearance.

Three of these projects are in Uttarakhand, 3 in Arunachal Pradesh, 2 in Manipur, and 1 each in Sikkim and J&K.

These include Dibang Central (3000 MW) by NHPC in Arunachal Pradesh, Tipaimukh Central (1500 MW) by NHPC in Manipur, Pakal Dul (1000 MW) under Joint Venture in J&K among others.

The projects would contribute up to 32.1 Billion Units of electricity per annum which would help to meet the power demand in the country. The Ministry of Power has highlighted need for quick clearances with respective Ministries particularly the Ministry of Environment & Forests.

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ADB to provide $350m loan for power asset upgrades in Madhya Pradesh...

 

The Manila-based Asian Development Bank (ADB) today said it had approved a $350 million loan for power asset upgrades in Madhya Pradesh that will allow the state to meet booming consumer demand for power.
 
“The state has made impressive network gains in recent years but demand is outstripping supply, and the quality of electricity needs further improvements, especially in rural areas,” said Mr Herath Gunatilake, Lead Energy Economist in ADB's South Asia Department.
 
“Our assistance for transmission and distribution improvements will help Madhya Pradesh’s efforts to provide good quality power, 24 hours a day," he said.
 
A press release from ADB said that Madhya Pradesh, whose economy is growing at a quicker rate than the national average, was expected to see its demand for electricity rise by about 11% a year between fiscal years 2013 to 2017, resulting in a potential transmission and distribution capacity gap of about 20%.
 
The mismatch between supply and demand has caused regular load shedding in the past, and currently only about two-thirds of all households are connected to the system, it said.
 
The Madhya Pradesh Power Transmission and Distribution System Improvement Project will carry out physical upgrades to increase capacity and deliver power more efficiently. It will fund about 1,800 circuit kilometers of transmission lines and more than 3,100 circuit kilometers of distribution lines, as well as building or upgrading transmission and distribution substations, the release said.
 
Training and other support will be given to staff of the Madhya Pradesh Power Transmission Company, as well as three state distribution companies, to strengthen their management capabilities and to make the companies more financially sustainable and service oriented.
 
The project will build on previous ADB investments in the state’s power sector - including transmission and distribution assets - totaling more than $1.3 billion since 2001.
 
Along with ADB’s loan from ordinary capital resources, the Government of India will provide $150 million for a total investment cost of $500 million. It will run for about four and a half years with an estimated completion date of December 2018, the release added.

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KEC International bags orders worth Rs 7.56 bn...

 

KEC International, a RPG Group infrastructure EPC major, has secured new orders worth Rs 7.56 billion in transmission, water, power systems and cables businesses.

In transmission business, the company bagged orders in the Americas, Saudi Arabia and Abu Dhabi amounting to Rs 3.24 billion from SAE Towers and National Grid SA.

In water business, the company received three orders in India worth Rs 2.45 billion from Bangalore Water Supply Sewerage Board, Government of Uttarakhand and Water Resources Department of Madhya Pradesh.

In power system business, the company bagged an order for establishment of 220/ 400KV Gas Insulated Substation (GIS) at Kishanganj in Bihar. This order secured from Power Grid Corporation of India for worth Rs 1.02 billion.

In cables business, the company secured orders fro supply power and telecom cables. The total value of these orders is Rs 850 million.

Shares of the company gained Rs 0.5, or 1.01%, to trade at Rs 50.15. The total volume of shares traded was 308,280 at the BSE (12.38 p.m., Friday).

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R-Power starts generation from Sasan UMPP second unit...

 

Reliance Power today said it has started electricity generation from the second 660 MW unit of the 3,960 MW Sasan ultra mega power project in Madhya Pradesh.

With the commissioning of the Sasan UMPP second unit, the company's overall generation capacity has crossed 3,200 MW.

The second unit of the project has commenced power generation in shortest time of just about a month from boiler light up, Reliance Power said in a statement.

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Suzlon Energy to quadruple the sales volume during 2013-14...

 

Suzlon Energy expects to almost quadruple its sales volume in 2013-14 by delivering wind turbines to generate 900-1,000 mw, compared with just 250 mw of equipment supplied last year.

"We believe the worst is over and that we are moving in the right direction, with a more positive external environment. We hope to have the company back in a position of strength by FY15," chairman Tulsi Tanti said.

Tanti, who was rated as the eight richest Indian in 2005 on the Forbes list of Richest Indians, built Suzlon from scratch into the country's largest maker of wind turbines in less than a decade.

He made big-ticket acquisitions, such as of German REpower Systems, to fuel his global ambitions, in the process accumulating debt of Rs 14,000 crore — almost six times its current market capitalisation. The burden of debt, coupled with a slowdown in the industry, pushed Suzlon into losses and eroded the wealth of Tanti.

These concerns have weighed on Suzlon's shares, which are down almost 47% from their year-earlier levels, even as the Bombay Stock Exchange's Sensex gained 8%. However, helped by a recent improvement in order execution and new orders, the shares have gained almost 70% since August, when they touched a 52-week low of Rs 5.76, to Rs 9.73 Thursday.

Suzlon sees better times ahead driven by its debt recast that is underway and early signs of a recovery in the global wind-energy market. Tanti is geared up for the new innings. "I am a fighter. I will not give up," he said. "Last two years, our entire focus was on liability management.

Now that we have completed the process, we are focusing on increasing execution and improving operational performance." Suzlon reported a loss of Rs 4,700 crore for the fiscal year ended in March 2013. The company's expectations of a turnaround are based on its strong order book — at the end of October, it had orders for 5.1 gigawatts, worth about Rs 43,834 crore and giving revenue visibility for two years. Also, in January this year, a consortium of 19 banks, led by State Bank of India, inducted Suzlon into a corporate debt-restructuring (CDR) programme for recasting Rs 9,500 crore of loans.

This has given the company a twoyear moratorium on principal and interest payments and additional working capital limit that would improve its cash position and drive order execution. Tanti said Suzlon expects India to add about 1,800 mw of wind-energy capacity in this fiscal year, aided by the government's policy on providing cash incentives to companies based on the actual power they generate, and push for wind projects in states.

"At the Suzlon level, with adequate working capital facilities, we should be in a position to achieve 500-600 mw from India, and 300-400 mw internationally," Tanti said, explaining his projection to sell 900, 1,000 mw of turbines this fiscal year. Analysts said the company has delivered projects totalling 440 mw in the first half of the financial year and is seeing a sustained pickup in project execution.

"We have added new products such as the 3 mw turbines and entered new geographies," Tanti said. "Also, the most important development is that some of the matured markets, where capacity addition had slowed, are now looking at wind energy again. The US, Canada and Germany are again upbeat about wind energy and they would award big-ticket orders," Tanti said.

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Lanco in talks with CESC to sell Budhil Hydro Power asset...

 

Lanco Infratech is in talks with Kolkata-based CESC to sell the Budhil Hydro Power Project, sources with direct knowledge said. Deal talks are hovering around Rs 750 cr for the 70 MW hyro power project in Himachal Pradesh, negotiations are still on, sources said.

Macquarie is the advisor to Lanco for sale of Budhil Hydro Project. Lanco needs to sell assets and infuse cash into the company to fulfill the terms of CDR (Corporate Debt Restructuring), a source said. A consortium of lenders has given a nod to a Rs 7,700 cr CDR package.

Lanco said, "the information is not true and we do not wish to comment on media speculation." Sanjiv Goenka of CESC was unavailable for comments on the development.

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