Essar Energy reiterates positive outlook

Essar Energy plc., the India-focused integrated energy company, has announced that it notes the recent share price performance and reiterates its positive outlook for the business.
Over the last 3 years, Essar Energy has invested over $8 billion, building a suite of assets across its refining and power businesses to meet India’s rapidly growing energy needs. Having completed the majority of its capital expenditure programme, the group is now focused on improving its operational and financial performance and implementing asset optimisation and refinancing programmes to improve margins, cash flow and profitability. Essar Energy continues to make good progress extending debt maturities in its power business. In the 1st half of FY2014, Essar Power raised $452 million of rupee bonds which were used primarily to repay existing project debt. The Reserve Bank of India has recently launched an initiative designed to protect infrastructure projects impacted by delays in government approvals by allowing lenders to move their repayment schedules by up to 2 years from the original date of commencement of commercial operations (DCCO). Essar Power has already applied to lenders of its Mahan I (1,200 MW), Hazira II (270 MW) and Paradip (120 MW) projects and also its Mahan transmission project for pushing out the repayment schedule. If successful, these actions would defer $150 million of repayments at these projects over the next 2 years.
In the short term, Essar Energy will seek to reduce capital expenditure by focusing only on essential maintenance, asset optimisation and project expenditure.
Essar Energy’s Chairman Prashant Ruia said, “Although our recent share price performance has been disappointing, our underlying business is strong and our future prospects remain positive.”

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