Reliance Group seeking loan refinance for Sasan UMPP as well
Reliance Power has refinanced two thermal power projects — Butibori and Rosa — under the Reserve Bank of India’s 5/25 scheme with additional loans of about Rs 3,500 crore provided by State Bank of India (SBI), Axis Bank, Vijaya Bank and Bank of Maharashtra.
Documents accessed by FE show the 600 MW Butibori project in Maharashtra got an additional Rs 2,000 crore from these lenders, while the 1,200 MW Rosa project in Uttar Pradesh secured refinance of Rs 1,500 crore from SBI.
Banks had recently refinanced another ADAG group company, Reliance Infrastructure, for its Mumbai metro rail project. A senior official in Reliance Infrastructure confirmed to FE the company is also looking to refinance loans to its 3,960 MW ultra mega power plant located in Sasan, Madhya Pradesh. “If we don’t get the loan refinanced, we will need to make high returns in the first 10 years to be able to pay off the loan and that is not possible as these projects have long gestation periods,” the official said. The Sasan UMPP was executed at a cost of R27,000 crore with the last unit of the plant commissioned almost a year before its projected zero date.
Reliance Power is estimated to have incurred a capex of Rs 3,500 crore in FY15, with net debt rising to Rs 28,749 crore from Rs 27,200 crore a year earlier. Analysts have drawn attention to the sharp increase in receivables at Rs 2,900 crore, the equivalent to five months of sales. The company reported revenues of Rs 7,202 crore, up 30% over the previous year, and a net profit of Rs 1,028 crore.
Revenues from the Butibori project were estimated at Rs 1,754 crore in FY15 while profit was pegged at Rs 266 crore. Outstanding debt at the end of March 2015 was Rs 2,943 crore. The unit operated at a plant load factor of 81.3%.
The Rosa plant was developed in two stages at an investment of R6,100 crore. Emkay Research notes the project reported a net profit of Rs 571 crore in FY15 on revenues of Rs 4,616 crore. At the end of March 2015, the outstanding debt amounting to Rs 3,500 crore.