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Nayara Energy raises Rs 2,400 cr via debt

Press Trust of India  |  New Delhi 

Ltd, formerly known as Essar Oil, today said it has raised Rs 2,400 crore through a maiden non-convertible (NCD) issue in the domestic market to meet working capital needs and refinance existing debt.

Nayara, owned by Russia's and Trafigura-UCP, saw its Rs 1,500 crore issue being over-subscribed by 60 per cent, the company said in a statement.

"The proceeds of the issue (Rs 2,400 crore) will be utilized mainly towards working capital requirements and refinancing of existing debt of the company," it said without giving details.

Last year in August, Russian acquired 49.13 per cent equity stake and (a consortium of Trafigura group and UCP PE Investments) purchased 49.13 per cent stake in Nayara Energy, along with captive port and power assets from at an Enterprise Value of USD 12.9 billion.

"Pursuant to this equity transaction, the credit rating of the company was enhanced by multiple notches reflecting parentage of strong shareholders, independent and empowered board, experienced management team, de-risking of operations owing to integration of assets, significant improvement in assets and liability profile and refinancing of long-term debt with elongated maturity profile at competitive interest cost," the statement said.

The response to the maiden issuance "demonstrated the confidence and appetite of institutional investors for NCDs of Nayara Energy," it added.

Commenting on the development, B Anand termed the event as a landmark in history of the company, being its first issue in the Indian debt capital market.

"The oversubscription of the issue shows the confidence of investors in renewed identity of the Company," he said.

said this will open-up alternate market for fund raising, which will not only provide flexibility in capital structure but will also further optimize the interest cost.

owns India's second largest single site refinery at Vadinar, with a current capacity of 20 million tonnes per annum. It also has over 4,500 petrol pumps spread across 28 states and 4 Union Territories.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, August 07 2018. 16:10 IST