Tata Power’s loss-making subsidiary, Coastal Gujarat Power Limited (CGPL), which owns the 4,000MW Mundra Ultra Mega Power Project (UMPP), has completed refinancing of the outstanding external commercial borrowings (ECB) loans amounting to $770 million (approximately ₹5,500 crore).
The refinancing was done through a mix of rupee-denominated debt instruments and equity funding from the proceeds of divestment of non-core assets of the company, the company said in a statement.
The refinancing of dollar loans of CGPL would help in rescheduling the cash requirements and reducing the effective interest cost, besides reducing foreign exchange related volatility for CGPL.
Ease cash flow
The refinancing is expected to ease cash flow burden resulting from the continuing losses due to under-recoveries in the Mundra UMPP.
Praveer Sinha, chief executive officer and managing director of Tata Power, said, “We have been looking at various options to improve viability of Mundra UMPP.
“This is one more step in the same direction as it reduces interest cost burden and cash flow burden on CGPL.”
