Nayara Energy raises Rs 24 bn via NCDs, aims to refinance existing debt

Nayara is hopeful that the first round of successful fundraising will pave the way for more interest cost reduction

Rosneft-promoted Nayara Energy raised Rs 24 billion worth of funds through its first domestic bond issue, the company said in a press statement on Tuesday. 

"Nayara raised Rs 24 billion through its maiden placement of non-convertible debentures (NCDs) in the domestic market. Axis Bank was the sole arranger for this NCDs issue. The issue got over-subscribed by 60 per cent over the base size of Rs 15 billion," the company said in its statement.

The company looks to utilise the proceeds to meet working capital requirements and refinance its existing debt. "The 'AA' rated (rating issued by CARE Ratings) secured NCDs were offered with three-year bullet maturity," the company added.

In August 2017, Russian oil major Rosneft acquired 49.13 per cent equity stake and Kesani Enterprises (a consortium of Trafigura group and UCP PE Investments) acquired 49.13 per cent equity stake in erstwhile Essar Oil, now renamed Nayara Energy, along with captive port and power assets from the Essar group. The deal was valued at $12.9 billion.    

The company is hopeful that the first round of successful fundraising will pave the way for more interest cost reduction. "Success of the debut capital market issue will open-up alternate market for fundraising, which will not only provide flexibility in capital structure but will also further optimise the interest cost," said  Anup Vikal, the chief financial officer of the company.