COUNTRY REPORT INDIA› TALWANDI SABO POWER RAISES RS10BN
TALWANDI SABO POWER , part of Vedanta Group,
has raised Rs10bn from three-year rupee
bonds at 8.55%, according to a filing on
National Securities Depository Limited.
The notes have an unconditional and
irrevocable guarantee from Vedanta
Limited.
Crisil has assigned a AA (structured
obligation) rating to the notes.
Yes Bank was sole arranger for the deal.
Separately, SADBHAV INFRASTRUCTURE PROJECT
has raised Rs1.7bn from five-year zero
coupon bonds at a 10.2% yield, according to
a NSDL filing.
The notes have a put and call option at
the end of three years.
Crisil has assigned a A+ (SO) rating to the
notes.
RESTRUCTURING
› ROLTA INDIA RSA BREAKS DOWN
A restructuring support agreement for
ROLTA INDIA has broken down after the
software company failed to transfer funds
to an escrow account by April 20.
Rolta defaulted on offshore bonds in
June 2016 and had won support for a
restructuring proposal from an ad hoc
committee of some of the holders of its of
its US$200m 10.75% senior notes due 2018
and US$300m 8.875% senior notes due
2019.
Under the proposal, the existing senior
bonds would be exchanged for US$50m of
upfront cash, US$270m of 4% unsecured
one-year notes, with the coupon payable in
kind, and US$230m of 4% five-year notes,
with a cash coupon.
Bondholders were invited to sign the
RSA, with a consent bonus of 1% of their
holdings to be paid if the proposal was
agreed. The company had hoped to close
the restructuring by the end of June.
Rolta announced the termination of the
RSA in a stock exchange statement, saying
said it would update the market on further
developments.
Moelis is financial adviser to Rolta and
Houlihan Lokey is advising the ad hoc
bondholder committee.
EQUITY CAPITAL MARKETS
› PNB METLIFE PLANS IPO
Life insurer PNB METLIFE aims to embark on
an IPO of US$150m–$300m later this year,
according to people with knowledge of the
plan.
Bank of America Merrill Lynch, Citigroup and
Kotak are leads on the float.
Punjab National Bank owns 30% of the
life insurer and MetLife International
Holdings holds 26%. Domestic financial
institutions control the remaining 44%.
Earlier this year, the state-owned bank
disclosed that companies owned by two
jewellers had defrauded it of US$2bn using
illegal guarantees issued by rogue staff at a
Mumbai PNB branch over several years.
For the financial year to March 31 2017,
PNB Metlife posted premium income of
Rs32bn (US$489m), up from Rs28bn a year
earlier.
In 2016, another PNB subsidiary, PNB
Housing Finance, raised Rs30bn through
an IPO. Shares of PNB Housing are up 0.2%
year to date, while those of PNB are down
45%.Existing listed life insurers in India are
ICICI Prudential, SBI Life Insurance and
HDFC Life.› INDOSTAR TO OPEN IPO ON MAY 9-11Home and vehicle finance provider INDOSTAR
CAPITAL FINANCE will open an IPO expected to
raise around Rs18.5bn between May 9 and
May 11.
The price range will be announced this
week.
The company said earlier the deal would
involve the sale of primary shares for Rs7bn
and 20m secondary shares.
Major shareholder IndoStar Capital will
sell 18.5m shares and other shareholders
1.49m shares. IndoStar Capital is backed by
private equity firm Everstone Capital.
The company earned net profit ofFiat India reprices project loan
Loans Carmaker converts PF loan into corporate financingFIAT INDIA AUTOMOBILES has converted a
US$250m brownfield project loan from
2016 into a corporate financing, significantly
reducing the interest costs and amending the
financial covenants.
Citigroup was the sole underwriter and
coordinator of the loan, which now has
US$230m outstanding and pays an interest
margin of 163bp over Libor – a 72bp cut from
the 235bp over Libor margin on the original
deal closed in February 2016.
All the existing lenders, except Export-
Import Bank of India, recommitted to the
amended financing. Federal Bank replaced
Exim India in the syndicate, which also
includes State Bank of India London, Axis
Bank and UniCredit.
The loan has a remaining door-to-door
life of 5.3 years, matching the maturity of
the 7.6-year deal signed in February 2016.
Participating lenders were offered a 30bp
amendment fee for an all-in pricing of
172.38bp based on a 3.2-year average life.
Repayments continue to take place in semi-
annual instalments.
The original loan paid a top-level all-in
pricing of 250bp based on the margin of
235bp over Libor and a 5.1-year average life.
The loan’s financial covenants and security
package have been amended, helping convert
the deal into a corporate borrowing from a
project financing structure. This was because
the project has commenced operations and
started selling Jeep-branded vehicles in India
and overseas last year.
Fiat India Automobiles has also wonupgrades to its ratings, which are now in the
Double A (Crisil/Icra) bucket compared with
the Single A ratings it had in 2016 when it
closed the original project financing.
The 2016 loan had a unique structure
for an Indian borrowing – the assets and
cashflows of the new plant were ringfenced
to the new borrowing, but lenders ranked
alongside the operating company’s existing
creditors.
That financing was non-recourse to either
of the borrower’s shareholders. Italy’s Fiat
Chrysler Automobiles (FCA) and India’s Tata
Motors are equal shareholders in Fiat India
Automobiles.
Under the terms of the original loan,
cross-default provisions had thresholds
stipulating that the Italian automaker
would cure any covenant breaches or
defaults, which would not transmit to
Tata Motors. FCA did not provide any
guarantee on the project financing, but
was the offtaker for the Jeep vehicles the
plant was to produce under a ‘take-or-pay’
arrangement that ensured the coverage of
repayments on the loan.
The Jeep manufacturing plant is located at
Ranjangaon, near Pune, about 190km from
Mumbai. Fiat India Automobiles has another
factory at the same location, which was first
set up under an alliance between the Indian
and Italian carmakers on a joint distribution
network and back-end support, along with
co-manufacturing of some of their respective
brands.
PRAKASH CHAKRAVARTI