Naresh Nayyar, chief executive, Essar Energy, talks to HT about the company’s results. Excerpts from the interview to Anupama Airy:
What are the projects driving your company’s growth?
Our recently-completed refining and power projects are delivering good results. The much higher margins at our flagship Vadinar refinery reflects the benefit of investment in increased complexity and capacity.
Any effect of depreciating rupee on Essar Oil?
Depreciating rupee is positive for EOL, which buys crude in dollars and sells products for which realisation is in rupees, but linked to dollars. A depreciating rupee will lower the overall debt when converted to dollar.
Why are you converting gas-fired plants to coal?
(This is) considering domestic gas availability and price of imported LNG. Even after price hike of natural gas, domestic availability will still be a challenge. In terms of costs, against 9-10 cents per kwh of power produced through LNG, it will cost only 4 cents per kwh if produced through coal.
What is the update on power bonds?
We are in the process of raising Rs. 5,000 crore through rupee bond to refinance Essar Power’s debt. This will reduce interest rates by 1.5-2.0 percentage points and push average maturity by 2-3 years.