Mytrah Energy India Raises Rs 100Cr In Mezzanine Funding

Hyderabad-based Mytrah Energy India Ltd (MEIL), a wholly owned subsidiary of London Stock Exchange-listed Mytrah Energy, has raised a fresh tranche of Rs 100 crore ($19 million) in mezzanine funding for a four-year term from PTC India Financial Services.
It is expected that relevant documentation and drawdown of this tranche will be completed by mid-January of 2012, the company has disclosed to the LSE.
Together with the previous two tranches of similar financing, this latest tranche will take Mytrah Energy and its subsidiaries’ total mezzanine funding to $132 million.
The group expects to repurchase all tranches of mezzanine funding from internal cash flows and the issue of senior debt instruments, bonds or other debt refinancing, within three to five years.
Mytrah, an independent power producer, owns and operates wind farms in India. The company, formerly known as Caparo Energy Ltd, changed its name to Mytrah in September 2011. MEIL has projects in various stages of development in the states of Rajasthan, Gujarat, Maharashtra, Andhra Pradesh and Karnataka.
Meanwhile, BinduVayuUrja Pvt Ltd, another wholly owned subsidiary of Mytrah, has secured new senior loan funding of Rs 960 crore ($192 million), comprising Rs 600 million ($120 million) underwritten by IDFC and Rs 360 crore ($72 million), which is at an advanced stage of syndication. This is one of the single largest senior debt placements for a wind power producer in India.
Private equity investments in renewable energy companies stood at $522 million across 14 transactions for the first three quarters of CY2011, according to VCCedge, the financial research platform of VCCircle. This is a remarkable rise, compared to the 7 deals worth $98 million in CY2010 and 8 deals worth $112 million in CY2009.
Recently, renewable energy start-up ReNew Wind Power Pvt Ltd, founded by prominent deal-maker and former Suzlon Energy COO Sumant Sinha, had received Rs 1,000 crore or $200 million from Goldman Sachs in one of the biggest private investment deals in the renewable energy sector in India.
In 2010, the country witnessed power utility firms dominate private equity deal-making, with conventional power firms raising over $1.5 billion in PE funding. These included companies like Asian Genco (raised $425 million), Moser Baer Projects ($290 million), GMR Energy ($305 million) and GVK Energy ($327 million), among others.

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1 Response

  1. saurabh.srivastava says:

    ‘Mezzanine Financing’— A hybrid of debt and equity financing that is is typically used to finance the expansion of existing companies. Mezzanine financing is basically debt capital that gives the lender the rights to convert to an ownership or equity interest in the company if the loan is not paid back in time and in full. It is generally subordinated to debt provided by senior lenders such as banks and venture capital companies.

    Since mezzanine financing is usually provided to the borrower very quickly with little due diligence on the part of the lender and little or no collateral on the part of the borrower, this type of financing is aggressively priced with the lender seeking a return in the 20-30% range.

    To attract mezzanine financing, a company usually must demonstrate a track record in the industry with an established reputation and product, a history of profitability and a viable expansion plan for the business (e.g. expansions, acquisitions, IPO).

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