Ruias’ energy biz plans on track
The London-listed Indian energy company Essar Energy is well on track to meet its expansion plans.business Updated: Aug 19, 2010 20:46 IST
The London-listed Indian energy company Essar Energy is well on track to meet its expansion plans.
The company has spent over $1.5 billion on 16 projects in the first half of the calendar year and has raised over 80 per cent of the debt financing it needs, Essar Energy Vice-Chairman Prashant Ruia told HT in a conference call from London.
The Essar Group subsidiary, founded by billionaires Shashi and Ravi Ruia, raised $1.85 billion (R8,602 crore) through an initial public offering in May. The equity funding has helped Essar, which has a $11-billion (R51,150 crore) capex programme by 2014, in its expansion plans as demand rises in India.
Prashant Ruia said Essar Energy has about $2.5 billion (R11,625 crore) of the funding in place, and is looking for another $1.2 billion (R5,580 crore).
The company is seeking to boost its power generating capacity to 11,500 megawatts by 2014 from the present 1,220 megawatts.
Ruia also said that while Essar wants to have at least 90 per cent of its assets in India, talks “are still ongoing” with Royal Dutch Shell to buy refineries in Europe.
“Our discussions with Shell are still very much on although they are not on an exclusive basis,” Ruia said. Shell entered talks with Essar over the sale of the three refineries — Stanlow in the U.K. and the Heide and Harburg refineries in Germany — late last year.
In its first earnings report since the power and oil and gas exploration company was spun out of Indian conglomerate Essar Group, Essar Energy said its first-half revenues were up 66 per cent at $4.76 billion (R22,134 crore) over the same period a year earlier — primarily on increased volumes and higher prices in refining.
However, net profit dropped 28 per cent to $111.9 million (R521 crore) in the first half of the current calendar year, from $155.5 million (R723 crore) in 2009.
“Our stated strategy is to create a low cost, integrated energy company to capitalise on India’s rapidly growing energy demand,” Ruia said. “We will look outside India as well, but only where this supports our core strategy and delivers value to our shareholders.”
Ruia also announced the appointment of P. Sampath as Essar Energy’s new Chief Financial Officer following the decision by its present CFO, Gerry Bacon, to leave the company at the end of September. Sampath’s appointment would be from September 1.
Essar Energy CEO Naresh Nayyar said Gerry Bacon joined Essar Energy in January 2010 to support the IPO and put in place the finance organisation for the new company. “He (Bacon) has decided to return to academia,” Nayyar said.