Essar Energy's India-based unit issues Rs. 7.5 billion 11-year bonds

By Susanna Moon

Chicago, July 17 - Essar Energy plc said subsidiary Essar Power Ltd. has completed a Rs. 7.5 billion 11-year rupee bond offering in India on Wednesday.

The terms of the offering were not included in the company's press release.

This is the second of a number of rupee bonds to be offered by Essar Power. When this tranche is completed, the bonds will total Rs. 50 billion, according to the press release.

Proceeds will be used to make repayments on loan facilities within the power business, particularly relating to the company's new coal fired power projects.

Essar Power was assigned a credit rating of A+ by ratings agency Credit Analysis and Research Ltd. of Mumbai in October 2012 for the proposed Rs. 50 billion bond issue.

The new bonds issued will be listed on the Bombay Stock Exchange and will be repaid from 2022 to 2024. But the company plans to refinance this bond issue with a Rs. 30 billion credit-enhanced rupee bond issue in due course, the release noted.

"This bond issue will allow our power business to benefit from longer debt maturity timeframes and lower interest rates compared to our existing debt facilities," Deepak Maheshwari, Essar Energy chief financial officer, said in the press release.

"Essar Energy is well positioned to capitalize on the growing demand for power in India."

Essar Global owns 76.82% of Essar Energy, which is a London-based energy company that does business mostly in India.

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