State-run NTPC on Wednesday said that it plans to raise $150 million, or roughly ₹1,200 crore, from the Japanese yen market, which the country’s largest power generator (Genco) will utilise for capex activities and to repay previous loans.
Furthermore, the facility also has a green shoe option to raise additional $600 million (around ₹4,900 crore) as Yen-denominated loan. NTPC has invited bids from banks and financial institutions for the same. The last date to submit bids is March 1, 2023, which will be opened on the same day.
“NTPC is looking to raise external commercial borrowings (ECB) in the form of unsecured term loan for JPY (Japanese Yen) equivalent to $150 million plus a green show option of JPY equivalent to $600 million. The proposed facility is being raised under the automatic route as permitted under the ECB guidelines of the Reserve Bank of India,” the maharatna company said in the tender document.
The lender can be a bank or financial institution either singly or jointly with other banks or financial institutions in a consortium of not more than a group of three institutions. In case of a consortium, the minimum underwriting commitment should be of JPY equivalent to $50 million each, it added.
The proceeds of the loan shall be utilised towards capital expenditure for ongoing or new capacity addition, renewable energy projects including hydro, coal mining and refinancing existing ECB or rupee loans availed domestically for capex, etc.
The door-to-door maturity is 10 years, while the loan’s average maturity will be seven years. The Genco will repay the loan in 7 equal annual instalments beginning from the fourth year.
The interest rate will be a floating interest rate linked to 6M compounded TONA plus margin, payable semi-annually in Japanese yen (JPY). TONA is the Japanese interest rate benchmark.
The loan will be unsecured, without any guarantee of Letter of Comfort from the central government. Negative lien will be provided with carve out for certain permitted borrowings for which security can be created by NTPC, the bid document said.
NTPC plans to ink the loan agreement by March 31, 2023 or any other date agreed by the Genco, it added.