Singapore’s Sembcorp looks to refinance India power unit’s $470m debt

The 2,640-megawatt Sembcorp Gayatri Power Complex in Nellore, Andhra Pradesh. Source: Sembcorp Industries Ltd

Singapore-based power producer Sembcorp Industries Ltd is looking to refinance long-term debt worth Rs3,000 crore (about $470 million) of its Indian thermal power unit Sembcorp Gayatri Power, two people aware of the development said.

Sembcorp Gayatri Power owns a coal-based power plant with a capacity of generating 1,320 megawatts (MW) of power, comprising of two 660MW units in the Nellore district of Andhra Pradesh.

Sembcorp Industries is in talks with State Bank of India (SBI) and Union Bank of India to raise Rs3,000 crore to refinance existing long-term debt of the company, said one of the people cited above, requesting anonymity as he is not authorized to speak to reporters.

“They are in talks to raise Rs3,000 crore of rupee debt from these banks. Sembcorp completed the construction of both the units last year and they have tied up some power purchase agreements (PPA) for the plant, including a short-term PPA of 300MW with the state of Telangana. The PPAs give them the ability to refinance debt raised earlier for construction of the projects,” he added.

Sembcorp Gayatri’s total debt stood at around Rs7,100 crore at the end of financial year 2015-16, data from the company’s filings with the registrar of companies shows.

Emails sent to Sembcorp Industries did not elicit any response. Emails sent to SBI and Union Bank too went unanswered.

Sembcorp Gayatri Power is a joint venture between Sembcorp Utilities, a unit of Sembcorp Industries, and NCC Infrastructure Holdings Ltd, which is promoted by NCC Ltd and Gayatri Energy Ventures, a wholly-owned subsidiary of Gayatri Projects Ltd.

In 2014, Sembcorp acquired a 45% stake in the power plant (then known as NCC Power Projects) for Rs848 crore. As of 31 March 2016, Sembcorp held 65% stake in the company and NCC Infrastructure Holdings Ltd held 35%, company’s filings show.

In 2010, Sembcorp made its first power investment in India when it acquired a stake in Gayatri Energy VenturesThermal Powertech Corp. India, a 1,320MW thermal power plant adjacent to the Sembcorp Gayatri Power plant.

Sembcorp has also invested in renewable energy in India.

In February 2015, Sembcorp Industries Ltd acquired a 60% stake in IDFC Alternatives Ltd-backed renewable energy firm Green Infra Ltd for Singapore $227 million (around Rs1,060 crore).

The acquisition marked Sembcorp’s entry into India’s renewable energy market. Green Infra has solar and wind energy assets. At the time of the acquisition, Green Infra had renewable assets worth 516MW.

Sembcorp is one of the few foreign utility firms that owns thermal power assets in India. Others include American firm AES and China Light and Power.

In 2016, French energy producer Engie SA sold a majority stake in the 1,000MW Meenakshi Energy coal-fired thermal plant in Andhra Pradesh to India Power Corp. Ltd. Engie had acquired the plant in 2013 from Hyderabad-based Meenakshi Energy and Infrastructure Holdings Pvt. Ltd for an undisclosed sum.

Sembcorp owns around 11,000MW of gross power capacity, globally. The company has total assets of over Singapore $22 billion and employs 8,000 employees globally.

Also Read:

Sembcorp gets $165m debt financing from IFC for Bangladesh power project

Temasek-backed Sembcorp set to inject $600m in its India power biz

This article was first published on LiveMint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.