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BGR Energy held a conference call on Nov 26, 2010. In the conference call the company was represented by B G Raghupathy, CMD, PR Easwar Kumar, CFO and R Ramesh Kumar, President Corporate.
Key takeaways of the conference call
The company raised working capital loan from a consortium of banks syndicated by IDBI Bank. Bank of India is one of the participating bank and has extended Rs 500 crore of working capacity loan by its sanction letter dated Oct 14, 2008. At any point of time the company has not dealt with Money Matters India for handling or processing any investments/ loans etc from any public sector financial institutions and banks.
Of the Rs 500 crore sanctioned the company has so far drawn only Rs 470 crore. Total fund based sanctions from the consortium were Rs 5000 crore and the company has drawn only Rs 1500 crore out of its limit. This shows the company is using that only for project purposes.
The company has strong track record in payment of loans. Moreover the loan repayments being escrowed with the receipts from generation companies which are largely of state PSUs or SEBs and thus nothing to worry about the loan quality.
Bank of India in its press note released today has quoted the loan lent to BGR Energy is satisfactory.
Despite two large bulk orders (of Reliance Power & Lanco) going out of the country, there is adequate business for all manufacturers given the pipeline of orders pending for finalisation/ tendering and the country's requirement.
NTPC bulk tendering - The PQ stage have been crossed and the NTPC has already completed technical discussion with Bhel, L&T and BGR. They have not started the technical discussion with the fourth player.
Rajasthan Rajya Vidyut Utpadan Nigam Orders (Suratgarh & Chabbra) - RRVUNL though have not sent out any official information, there are enough indication that the orders will certainly be finalised by Dec 2010. The orders which were supposed to be finalised by August 2010 has slipped by 2-3 months on account of reasons on the RRVUNL side.
Currently the company has an in built EPC capability to execute 10 projects parallely.
BTG JV Project cost aggregates to Rs 4400 crore for both boiler and TG facility. The plant is expected to come up at a location 70 kms south of Chennai. The boiler plant and turbine plant though on a same highway will be in two different places at a distance of about 17 kms between them. The boiler plant will commence operation in 18-24 months and turbine plant in 3 years. The company has already started bidding for BTG orders.
License fee in three 1/3 on signing, second payment receiving on technical doc third and final on mfg capacity getting commissioned. The project cost included the license fees as well as the township cost for the workers. Manpower required for Boiler unit is 2500 and that for Turbines is 1500.
Of the total project cost of Rs 4400 crore for BTG JV the equity investment on the part of BGR Energy aggregate to Rs 950 crore, which will be invested over a period of 3.5 to 4 years. The equity contribution will be managed from internal accruals. The company currently has a cash and cash equivalent of Rs 500 crore and there will be further cash generation from current operations.
The initial installed capacity of both boiler and turbine unit will be of 5 numbers of turbine and boilers of 660/700/800/1200 MW. The plant is flexible enough for quick expansion.
The company is looking to book orders for 5 units initially.
Currently the company is in negotiation with many IPP projects for both BTG as well as EPC contracts. Tenders expected soon include a CFBC (2X300 MW) order in Gujarat, a 1X600 MW power project in TN. In addition two gas projects are to be retendered.
Vijayawada BoP project - the project is already completed and handed over. Receivable in this project is only the retention money and the company is hopeful of receiving it in another 20 days.
Kalisindh project - Fund based is Rs 700 crore and Non Fund based is Rs 3150 crore. Of which the company has drawn only Rs 197 crore.
The company is about to sign a JV for Solar power technology. The company has already signed a MoU. This will facilitate the company to execute solar power plants upto 50 MW capacity.
Orissa Power plant - It will be a separate SPV and the structure has not yet been finalised. The plant will not be executed under the company even though the MoU with Orissa govt is signed by it. Current status is the government is supposed to handover the land. Public hearing for environment clearance in scheduled on 3rd week of January 2011. The company has applied for all approvals. The land is barren land and hopes of finalising the land acquisition in friendly manner.
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