Caparo Energy raises $78.5 Million

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Caparo Energy raises $78.5 Million
Hyderabad: Hyderabad-based Caparo Energy, a wind-based power producer company, has raised $78.5 million (350 crore) through mezzanine financing to IDFC India Infrastructure Fund managed by IDFC Project Equity Company. Morgan Stanley was the sole advisor to the transaction, reports DNA. The funding is mezzanine for a six-year term and will not dilute equity. The interest rate is around 14 percent. The company plans to raise another $33.5 million, which is expected to be finalized within the next few weeks. The fund will be utilized to finance projects with a combined capacity of around 700 MW. Mezzanine financing is a hybrid of debt and equity financing that is mostly used to finance the expansion of companies. The fund has been raised by issue of preference shares with a six-year term. Ravi Kailas, CEO, Caparo Energy, said that this fund together with the second tranche expected to be secured shortly, put the company in a position to fund approximately 700 MW of projects, with no further equity dilution to the existing shareholders. Caparo Energy is listed on AiM, a market of the London Stock Exchange, under the ticker "CEL" and has a market capitalization of approximately 1, 400 crore. The investors include some of the largest funds in the world such as Henderson, Eton Park, Capital International and Black Rock. The company seeks to generate predictable and long-term cash flows by building up a portfolio of wind power generating assets in the currently fragmented Indian Wind Energy Market. It intends to own a portfolio of wind farms with a target total installed capacity of 5,000 MW by the year 2017. It has entered into a binding partnership agreement with one of India's largest turbine producer, to receive 3,000 MW of grid-connected wind farms on a turnkey basis by March 2016 and is in advanced stages of negotiation to acquire land for 2,000 MW in various states. It has a capacity of around 100 MW and has three projects in Rajasthan, Gujarat and Maharashtra. An additional 750 MW will be generated from projects in Gujarat (300 MW), Andhra Pradesh (100MW), Maharashtra (100MW), Rajasthan (75MW), Karnataka (100MW) and Tamil Nadu (75MW). The company's first project of 42 MW comprising 20 Suzlon S-88 2.1 MW wind turbine generators has begun operating in Tejwa, Rajasthan. Five WTGs, totaling 10.5 MW, are currently connected to the grid and the company expects a total fo 42 MW to be fully connected by mid-July 2011. The second project is approaching its completion in Mahidad, Gujarat, which comprises 12 Suzlon S-88 2.1 MW WTGs, totaling 25.2 MW and expects that the 12 WTGs will be completed by mid-August 2011.The third project is in Maharashtra, which comprises of 16 Suzlon S-88 2.1 MW WTGs and totaling 33.6MW is expected to be completed by December. Ravi Shankar Kailas is the CEO of the company and has 20 years of entrepreneurial experience in telecoms, software and real estate. He was the founder of a number of start-ups, including Zip Global Network, a telecom service company, subsequently sold to Tata Teleservices, Xius Technologies, a telecom software company which launched the world's first inter-operator prepaid roaming service and which was merged with a leading SEI CMM Level 4 software company, and Altius, a real estate investment company which was later sold to The Chatterjee Group. He has a Bachelors degree in Telecom Engineering from Osmania University and a Masters degree from the Graduate School of Business, Stanford University.