Essar Energy to commission 1 power projects by March 2012

Essar Energy Monday said it expects to complete three power projects by March next year that would increase its total generation capacity to 4,510 Mw.

The company, a part of Ruias-led conglomerate Essar group, is also planning to float a sponsored ADR programme this year that would allow American investors to trade in Essar Energy shares. London-listed Essar Energy also has interests in oil and gas and owns the Vadinar oil refinery in Gujarat.

“In Power, we expect to commission three projects, Mahan I, Salaya I and Vadinar P2, by end March 2012 which will increase our total generation capacity by 2,910 MW to 4,510 MW,” Essar Energy said in its interim management statement for the period ended September 30. “We expect to complete a further 7 power generation projects by the end of March 2014 to take our total generation capacity to 9,670 MW,” it noted.

The 1,200 MW Salaya I and 510 MW Vadinar P2 projects are located in Gujarat while Mahan I is in Madhya Pradesh. According to the statement, the company is looking to initiate American Depository Receipt (ADR) programme, for which BNY Mellon has been appointed as the depository bank.

“To further enhance the ability of a wide range of institutions to invest in Essar Energy, the company has decided to establish a Level 1 (Over-The-Counter) sponsored ADR programme.

“… it is expected that the ADR programme will be in place before the end of 2011, opening up a new source of potential investors in Essar Energy,” it said.

When contacted, an Essar spokesperson said the proposed ADR programme is just to allow US investors to trade in Essar Energy shares and that there would not be any kind of share issue or raising capital. As on September, Essar Energy’s net debt stood at USD 5,507 million, which is in line with its plans.