Infrastructure Development Finance Company Ltd (IDFC) is investing $33.5 million or Rs 150 crore in the Indian subsidiary of London’s AIM-listed (Alternative Investment Market) wind energy firm Caparo Energy Ltd. The company is aiming to build a portfolio of wind firms with an installed capacity of up to 5,000 MW by 2017.
This is the second tranche of mezzanine funding for the wholly owned unit Caparo Energy (India) Ltd, which had earlier raised $78.5 million (Rs 350 crore) from IDFC Project Equity’s Indian Infrastructure Fund.
While the first tranche was for a term of six years, the current tranche has a shorter duration of four years. The company said that “both tranches of mezzanine financing entail no equity dilution for Caparo Energy’s existing shareholders. It also expects to repurchase or buy back both tranches of mezzanine from internal cash flows and the issue of senior debt instruments, bonds or other debt refinancing, within three to five years.”
Caparo expects that the total funding of $112 million (Rs 500 crore), along with existing resources, will be adequate to develop 700 MW of wind projects.
Caparo Energy was listed on AIM in October last year, raising £50.2 million (around Rs 370 crore). Its investors include Henderson Global (9.99 per cent), BlackRock (5.31 per cent) and Eton Park International (3.33 per cent).
Caparo Energy, which already has 52 MW capacity commissioned, had entered into a deal with Suzlon Energy for 1,000 MW of wind power projects, of which 500 MW are expected to be commissioned by March, 2012, and the remaining by March, 2013. The total value of the 1,000 MW order was at Rs 5,700 crore ($1.24 billion). The initial projects, totalling 100.8 MW, are coming up in Rajasthan, Gujarat and Maharashtra.
Change In Company Name; Management Team Revamp
Caparo Energy has called for an EGM, seeking shareholder approval to change the name from Caparo Energy Ltd to Mytrah Energy Ltd.
Also, Angad Paul, CEO of the Caparo Group, is stepping down from his current role as non-executive chairman, but will continue as a non-executive director. Ravi Kailas, the current CEO of the firm, has been made the chairman.
According to Caparo, R. Ramakrishnan, former MD at GMR Industries who also headed its renewable energy business, has been appointed as president of Caparo Energy (India). Earlier, he was the CEO of the Sanmar Group and worked with the Murugappa Group as well.
“The closing of the second tranche of mezzanine financing in a timely manner puts our company in a position to fund over 700 MW of wind projects without any dilution to existing shareholders. As the company’s transformative growth continues, its identity has also evolved. Accordingly, the company is proposing to change its name to Mytrah Energy Ltd and we are excited by the company’s prospects of trading under this new identity. The Board would like to re-iterate its gratitude to have begun as Caparo Energy and would like to thank the Caparo Group for its on-going support to the company,” said Ravi Kailas, Caparo Energy’s chairman and CEO.