Essar Energy refinances $450 mn bridge loan

Lines up $300 million 3-yr debt and $150 mn cash accruals to service loan

Essar Energy Plc today said it has refinanced $450 million bridge (short-term) loan that was due for repayment in December this year.

The London-listed energy firm has refinanced the bridge loan with a new $300 million three-year secured loan facility and $150 million of internal cash resources.

Bridge loan is generally referred to loans taken for a short duration.

"The new $300 million 3-year secured loan facility is being provided by a consortium of banks who were the lenders under the original $450 million bridge loan facility," the Indian-focused company said in a statement.

Separately, Essar Energy has tied up with Essar Global Ltd for a $250 million subordinated unsecured loan facility having a duration of 3.5 years.

Essar Global has 76.82% stake in Essar Energy.

The $250 million loan is being provided on normal commercial terms and would be utilised for general corporate purposes, Essar Energy said.

"The facility is currently undrawn, but can be drawn in full or in part at any time during the 3.5 year-life of the facility," it added.

Essar Energy CEO Naresh Nayyar said the completion of these financial tie-ups provide additional debt facilities for the company.

The entity, through its subsidiaries, has an installed power generation capacity of 2,200 MW and also owns the Vadinar refinery in Gujarat.

"The successful commissioning of the Vadinar refinery and near completion of three of our major power plant projects marks an inflexion point in our capital expenditure cycle and will see a significant improvement in the cash flows within our businesses," Nayyar added.