CG Power plans Rs 500-cr equity-based funding, new debt repayment schedule

CG Power and Industrial Solutions (CG Power) will seek Rs 500 crore worth of equity-based funding and modify the repayment timeline for debt due for the next 12 months, the company told analysts on Wednesday. 

“We have put together a plan with lenders for a new repayment plan for the debt that comes up for repayment in the next 12 months,” a company official informed analysts on the call. The official added around Rs 1,000 crore worth of debt is up for repayment in the next one year’s time.  

The officials also added the company has pruned its order book to ensure it is able to execute and deliver orders in a timely manner. The quantum of reduction in the order-book was not disclosed. “Ebitda is going to be tight with a weak working capital. We had to tone down our order book to ensure we are able to execute and deliver,” officials told analysts on the call. The management is hopeful the company will return to healthy margins in 12-18 months, with the new debt repayment schedule and equity infusion efforts. 

Part of its plan to sell its CG house asset and Kanjurmarg Land parcel in Mumbai, officials added they expected net proceeds in the range of Rs 600 crore from the two deals. 

Last week, CG Power informed exchanges about a fraud at the company and said its liabilities, advances and net-worth were under-stated. In the Wednesday call, the management added the second phase of investigation into these irregularities is under-way. On Sebi’s role in the ongoing investigation, the officials added: “Apart from them seeking information have not heard any further from Sebi.” 

On August 25, Press Trust of India reported investors and lenders to the company wanted promoter Gautam Thapar to be removed as chairman of the company owing to the investigation.

The management on the Wednesday call, however, said they had not received any request for the same.