Tata Power's subsidiary Coastal Gujarat Power raises Rs 27 bn through NCDs

Creates Rs 31 billion contingency liability for Tata Power

Tata Power’s Mundra subsidiary Coastal Gujarat Power has raised Rs 27 billion through an issue of non-convertible debentures (NCD) s, the company said in a statement on Monday.

“Coastal Gujarat Coastal Gujarat Power (CGPL) has successfully issued and allotted Guaranteed, Unsecured, Non-Cumulative, Redeemable, Taxable, Listed, Rated NCDs for an amount of Rs 27 Billion on private placement basis issued in two series -amounting Rs 17 Billion for a tenor of 5 years and Rs10 Billion for a tenor of 10 years,” the company said in its statement.

The NCDs will create a contingent liability not exceeding Rs 31 Billion for Tata Power, the company said in its statement.

Coastal Gujarat, the subsidiary that holds the Mundra power plant asset, has been struggling with financial losses owing to higher fuel costs and a comparatively lower tariff payable under the power purchase agreements that it signed. “The debt obligations of CGPL under the NCDs are payable by Tata Power,” the company said in its statement.

CGPL plans to use the proceeds of these NCDs to refinance foreign currency debt, funding of hedge unwinding costs relating to re-finance of foreign debt, issues expenses, capital expenditure and augmentation of working capital.