TIDMCEL
RNS Number : 7248G
Caparo Energy Ltd
17 May 2011
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR
JAPAN
Press Release 17 May 2011
Caparo Energy Limited
("Caparo Energy" or the "Company")
Progress with Suzlon: Delivery of Initial Projects Ahead of
Schedule
2,000 MW Gamesa Agreement
Secured Land for up to 3,000 MW
Update on Mezzanine Funding
The board of directors of Caparo Energy (the "Board") is pleased
to announce a number of developments in connection with the
Company's operations.
Suzlon
In connection with the Company's agreement with Suzlon Energy
Limited ("Suzlon"), the Board is pleased to report that first
deliveries, meaning commissioned and connected to the grid, of the
initial 100.8 MW of projects, as announced on 28 January 2011, are
now anticipated to commence by the end of June 2011, several months
ahead of the previously announced schedule of Q4 2011. The company
has also recently drawn down a tranche of senior debt from its
lenders for these projects.
In addition, the Company is currently in the process of
finalising the sites for the remaining 400 MW of projects, which
are due to be commissioned and connected to the grid by March 2012,
and anticipates placing purchase orders for these between July and
September 2011. On this basis, the Board believes that the Company
is on track to meet the roll-out schedule announced in January
2011, which would result in a cumulative 500 MW of capacity being
commissioned by March 2012 and a further 500 MW to be commissioned
progressively by March 2013.
Gamesa
The Company also announces that it has entered into, through its
wholly owned subsidiary Caparo Energy (India) Ltd, an agreement
with Gamesa Wind Turbines Pvt Ltd ("Gamesa"), a global leader in
wind turbine manufacturing, for the supply, erection, commissioning
and operation/maintenance of a further cumulative 2,000 MW of
turbine capacity for wind power projects to be set up in India (the
"Gamesa Agreement"). The Gamesa Agreement provides for the turbine
capacity to be delivered progressively from 2012 up until the end
of 2016.
The Board believes that the Gamesa Agreement is priced
attractively, relative to current market prices for each of the
models of turbines to be supplied, and is subject to certain
adjustments, for deliveries after the first 450 MW, based on an
agreed formula to reflect changes in applicable international
indices. In return for the delivery of up to 2,000 MW of capacity,
Gamesa will receive certain commitment advances over a period of
three years..
Under the Gamesa Agreement, Caparo Energy will be responsible,
inter alia, for site assessments and the procurement of the land
required for installation of the wind farms.
Land
The Company has secured land that it believes will be suitable
for the installation of 3,000 MW of wind power generation farms in
sites across various wind-rich states. These include leases and
direct allotments, licences and sanctions from the respective state
authorities and the initial permissions for the installation and
connection of power generation farms.
Preliminary wind assessment studies undertaken by the Company
through an internationally recognised firm in this field indicate
that these sites will represent attractive wind resources once
developed. The Company has commenced the installation of wind masts
on these sites, in order to collect more detailed wind data, and
anticipates that the first wind power projects for these locations
will be commissioned from Q4 2012.
The securing of independent access to land and turbines is part
of the Company's long-term strategy for value creation, as
previously disclosed in its AIM Admission Document.
Funding
As previously announced on 28 January 2011, in order to limit
the Company's reliance on its internal cash flow in the short and
medium term and to ensure that the Company is able to acquire
generating capacity in accordance with the delivery timeframes set
out in both the Suzlon and Gamesa agreements, the Company announces
that it is in advanced discussions with a number of parties in
connection with the provision of additional mezzanine financing and
that several non-binding term sheets have been agreed. This
financing, which is anticipated to fund in excess of 600 MW of
projects to be delivered under both the Suzlon and the Gamesa
agreements, is expected to be finalised in various tranches by the
end of Q3 2011. A further update on the outcome of these financing
initiatives will be provided in due course.
Ravi Kailas, Caparo Energy's Chief Executive Officer, said:
"We have been working closely with Suzlon and are pleased with
the advancement of the delivery schedule of the initial projects
and the progress on placing our next purchase orders with them.
"The long term agreement with Gamesa represents the kick-off of
our second phase of building wind farm capacity. This has been
achieved sooner than we expected. The Indian wind energy market has
been very active and we view the terms of this new agreement as
favourable to us. Through our strong relationships with market
leaders Suzlon and Gamesa, the Company should, be able to secure
its supply of wind power capacity in a rising market at
preferential pricing.
"Successfully securing access to land required to meet this
supply will create significant long-term value for the Company and
its stake holders."
Further information on the Company can be found at
www.caparoenergy.com.
- Ends -
For further information please contact:
Caparo Energy Limited
Ravi Kailas, Chief Executive Officer +91 40 4396 0000
Strand Hanson Limited
Angela Peace / Paul Cocker / James Harris +44 (0) 20 7409 3494
Mirabaud Securities LLP
Peter Krens / Rory Scott +44 (0) 20 7878 3360
Pelham Bell Pottinger
Charles Vivian / Philippe Polman +44 (0) 20 7861 3232
This information is provided by RNS
The company news service from the London Stock Exchange
END
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