JSW Energy is looking to tie up R1,800 crore in debt funding for its 240-MW Kutehr hydro plant in Himachal Pradesh, a company official told FE. This comes at a time when the?Sajjan Jindal-controlled power producing firm is charting its capacity expansion following another quarter of impressive profit. The company, which on Friday reported a nearly 50% surge in quarterly profits to R335.7 crore on lower fuel costs, expects to tie up the funds within this financial year, said Pramod Menon, who was promoted to the position of director, finance, from chief financial officer earlier in the day.
It has not yet decided whether the company will raise the debt domestically or from abroad. The company will also look to refinance R4,000-5,000 crore in debt to reduce interest costs in the next 6-8 months, Menon said. While many Indian companies have been eyeing foreign debt because of lower interest rates, Menon said JSW Energy is keen on avoiding forex risks such debt would involve.?
?We?ll hopefully be able to replace our rupee debt with cheaper rupee debt, lowering interest costs by 100 bps,? he said. JSW Energy, which currently has a gross consolidated debt of around R10,377 crore, pays interest of about 12% on its rupee debt. The company has a debt-to-equity ratio of 1.67, which is considerably better than its rivals such as Adani Power and Tata Power. It has received all necessary environmental approvals for its hydroelectric plant in Himachal and, up to March 31, had spent R225 crore on the project.
Apart from Kutehr, the company has no major expansion plans for the coming financial year, and is scouting the world for coal assets to secure long-term fuel supply for its plants in India. However, JSW Energy, which has around R400 crore in cash and bank balances, has not been able to find a suitable asset so far, Sanjay Sagar, joint MD & CEO, told reporters at a press conference in Mumbai on Friday.
The company also increased its dividend to R2 per share for fiscal 2013, or about 20% of earnings, as it dips into its cash pile. It has historically had a payout of 5-10%.
Weak international coal prices have been benefiting India’s private power producers, who mostly rely on imported coal. In the latest reported quarter, the company easily surpassed analyst expectations for quarterly profit as it reaped the rewards of lower coal prices, with fuel costs falling 11%.?
The company, which now operates 3,140 MW ? it added 540 MW in Barmer, Rajasthan in the quarter ? said total income from operations rose 11% to R2,301 crore.
JSW Energy generated 4,686 million units of electricity, compared with 4,618 mu last year. The company said 53% of the total sales were through short-term contracts or merchant sales, and 40% of total sales were under long-term power purchase deals.
However, the company recorded lower plant load factor (PLF) at all its plants in the quarter, with Vijayanagar averaging 101% versus 102% last year.?The Ratnagiri plant operated at 82% of its capacity, versus 85% in the year-ago period, as a result of an unscheduled shutdown at the plant due to technical issues.