Adani Energy Solutions Ltd · NSE:ADANIENSOL
Adani Energy Solutions — Adani Transmission — Debt Investor Presentation (March 2016)
35 slides from Adani Energy Solutions's debt investor presentation, March 2016
Slide 1: Adani Transmission Limited Roadshow Presentation
Strictly Private and Confidential Adani Transmission Limited Roadshow Presentation March 2016
Slide 2: Legal Disclaimer
Legal Disclaimer This document is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933 (the “Securities Act”), and may not be offered or sold in the United States, except pursuant
Slide 3: Offering Summary
Offering Summary Issuer: Adani Transmission Limited (“ATL” or the “Company”) Issue: Fixed Rate Senior Secured Notes (issued as per RBI guidelines for INR denominated bonds to overseas investors) Distribution Format: Rule 144A / Reg S Issuer Rating: Fitch: BBB- /Stable; S&P: BBB- /Stable ; Moody’s: B
Slide 4: Contents
Contents A Adani Group and Company Overview B ATL – Investment & Credit Highlights C Investment Grade Rating D Appendix 3
Slide 5: A. Adani Group and Company Overview
A. Adani Group and Company Overview Picture : AC Yard Mohindergarh
Slide 6: Adani Group: One of India's Leading Infrastructure Conglomerates
Adani Group: One of India’s Leading Infrastructure Conglomerates Adani Promoter Group Mr. Gautam Adani, Group founder First generation entrepreneur, one of the leading businessmen in India with 30+ years of experience Professionally and Independently managed verticals led by industry veterans 75% 56
Slide 7: Adani Transmission Limited: Overview
Adani Transmission Limited: Overview Asset Location Key Business Highlights • Mundra – Dehgam & Mundra – Mohindergarh lines servicing the One of the Largest Private Sector Transmission Companies Western grid & Northern grid • Tiroda lines connecting mine-mouth power plants to demand rich western Mah
Slide 8: B. ATL – Investment & Credit Highlights
B. ATL – Investment & Credit Highlights Picture : Tiroda-Koradi-Akola-Aurangabad Transmission Network 7
Slide 9: ATL – Investment & Credit Highlights
ATL – Investment & Credit Highlights 5 1 Compelling Strong Industry Financial Fundamentals Performance Robust Stable Structural Regulatory 4 Protections Mature Framework 2 Operational Assets 3 8
Slide 10: ATL – Investment & Credit Highlights
ATL – Investment & Credit Highlights 5 1 Compelling Strong Industry Financial Fundamentals Performance Robust Stable Structural Regulatory 4 Protections Mature Framework 2 Operational Assets 3 9
Slide 11: India: Strong Fundamentals
5 1 4 2 India: Strong Fundamentals 3 Strong macroeconomic growth expected to be supported by stable inflation and decreasing interest rates Macro Growth Gaining Momentum(1) Stabilizing Inflation(2) Interest Rates Trending South(2) GDP Growth (%) 8.1% Indian Govt Bond (10yrs) 8.0% CPI WPI 16% 8.0% RB
Slide 12: Indian Power Sector: Compelling Fundamentals
5 1 4 2 Indian Power Sector: Compelling Fundamentals 3 Low Per Capita Power Consumption… …Resulting In Increased Investments Energy Consumption Per Capita (2013)(1) (kWh / year) Low per capita power consumption and continued power deficits 15,520 driving significant capacity additions 12,987 10,06
Slide 13: Strong Growth in Transmission Sector
5 1 4 2 Strong Growth in Transmission Sector 3 Private Sector Participation on the Rise …Resulting In Sustained Growth Potential Govt. 100% 100% 100% 100% 99% 97% 94% Robust transmission infrastructure required for Private ‐ ‐ ‐ ‐ 1.2% 3.3% 6.0% • seamless and efficient power availability across r
Slide 14: ATL – Investment & Credit Highlights
ATL – Investment & Credit Highlights 5 1 Compelling Strong Industry Financial Fundamentals Performance Robust Stable Structural Regulatory 4 Protections Mature Framework 2 Operational Assets 3 13
Slide 15: Well Defined Regulatory Framework
5 1 4 2 Well Defined Regulatory Framework 3 Overview of Regulatory Bodies Governing the Sector Ministry of Power (MoP) Planning, policy formulation, processing of projects for investment decisions, monitoring implementation of projects, and enactment of legislation in regard to power generation, tra
Slide 16: Established & Predictable Tariff Policy Framework
5 1 4 2 Established & Predictable Tariff Policy Framework 3 CERC and MERC have a Long Standing History of Maintaining and Defining Tariffs CERC and state regulatory body (e.g., MERC) determines return on assets (ROA) the framework for operations & maintenance costs CERC – 18 Regulatory deter
Slide 17: Fixed Return With Full Cost Pass-through
5 1 4 2 Fixed Return With Full Cost Pass-through 3 Asset Life of more than 35 years and license validity of 25 years with license renewal option of 10 years Project cost has to be approved by the regulator to calculate the tariff Known inputs with a record of open and transparent application Ann
Slide 18: Payment Pooling Mechanism
5 1 4 2 Payment Pooling Mechanism 3 Payment pooling mechanism substantially reduces any counter party default risk Payment Pooling Mechanism Tariffs for all transmission licensees are collected by either the CTU (for Inter-state Transmission System) or the STU (for Intra-state System) All collec
Slide 19: Credit Protection Mechanism in License
5 1 4 2 Credit Protection Mechanism in License 3 Embedded Credit Support Mechanism in Transmission License CERC Assets: Revolving L/C for 105%/210% of average monthly billing by State/ private utilities Letter of credit & bank guarantee to CTU/STU MERC Assets: Revolving L/C for 100% and BG for 3
Slide 20: ATL – Investment & Credit Highlights
ATL – Investment & Credit Highlights 5 1 Compelling Strong Industry Financial Fundamentals Performance Robust Stable Structural Regulatory 4 Protections Mature Framework 2 Operational Assets 3 19
Slide 21: Long Life of Assets and Contracts; Excellent Operating History
5 1 4 2 Mature Operating Assets 3 1 Completed Assets with No Construction Risk Long Life of Assets and Contracts Mundra – Dehgam Mundra – Mohindergarh Tiroda – Warora Tiroda – Aurangabad Regulator CERC CERC MERC MERC License Period 25 years + 10 years 25 years + 10 years 25 years + 10 years 25 years
Slide 22: ATL – Investment & Credit Highlights
ATL – Investment & Credit Highlights 5 1 Compelling Strong Industry Financial Fundamentals Performance Robust Stable Structural Regulatory 4 Protections Mature Framework 2 Operational Assets 3 21
Slide 23: Ring-fenced Obligor Group Structure
5 1 4 2 Ring-fenced Obligor Group Structure 3 Lenders Adani Transmission Limited (Issuer) 100% 100% 100% 100% 100% 100% ATIL MEGPTCL STL RRWTL CWTL ATRL Mundra - Dehgam Raipur - Mundra - Sipat - Chhattisgarh - Tiroda - Aurangabad Rajnandgaon - Suratgarh-Sikar Mohindergarh Rajnandgaon WR Warora Tirod
Slide 24: Structural Protection to Debt Investors
5 1 4 2 Structural Protection to Debt Investors 3 DSCR test : minimum DSCR of 1.1x (distribution lock-up at DSCR of less than1.2x) Covenants/ Liquidity Reserve Account (“LRA”) for funding SPV projects Undertaking Incurrence of additional debt undertaking No capex for new projects to be under
Slide 25: ATL – Investment & Credit Highlights
ATL – Investment & Credit Highlights 5 1 Compelling Strong Industry Financial Fundamentals Performance Robust Stable Structural Regulatory 4 Protections Mature Framework 2 Operational Assets 3 24
Slide 26: Strong Financial Performance
5 1 4 2 Strong Financial Performance 3 Revenues from Operations EBITDA (1) EBITDA Margin (1) (USD mm) (USD mm) 94.8% 241 232 92.8% 225 92.2% 208 172 163 86.5% 81 71 FY14 FY15 9M FY15 9M FY16 FY14 FY15 9M FY15 9M FY16 FY14 FY15 9M FY15 9M FY16 Predictable revenue with high EBITDA margin Note: Average
Slide 27: ATL – An Excellent Investment Opportunity
ATL – An Excellent Investment Opportunity Compelling Industry Strategically important sector in one of the world’s fastest growing economies Fundamentals Significant generation capacity addition expected to drive sustained growth Stable Regulatory Well defined regulatory framework and establis
Slide 28: C. Investment Grade Rating
C. Investment Grade Rating Picture : Mundra – Mohindergarh Transmission Line
Slide 29: Investment Grade Rating
Investment Grade Rating Ratings BBB- / Stable BBB- / Stable Baa3/ Stable Stable cash flows driven by a favorable regulatory ATL’s credit profile benefits from a stable and ATL's regulated transmission business is environment, the company's power transmission favourable regulatory environment.
Slide 30: D. Appendix
D. Appendix India’s First Private HVDC Utility 29
Slide 31: A. Financial Statements Summary
A. Financial Statements Summary 30
Slide 32: Detailed Profit and Loss Summary
Detailed Profit and Loss Summary (US$ mm) FY15 FY14 9M FY16 9M FY15 Comments Revenue from Operations 225 81 241 172 Revenue from operations increased by 179.2% in FY15 primarily as a result of Set 1 and Set 2A of MEGPTCL becoming Other Income 1 1 9 1 operational in February 2014 and Set 2B of MEGP
Slide 33: Detailed Balance Sheet Summary
Detailed Balance Sheet Summary (US$ mm) FY15 FY14 9M FY16 9M FY15 Comments Fixed Assets 1,679 1,585 1,544 1,614 In February 2016, we issued ~US$78mm of Non-Convertible Debentures, the Long-Term Loans and Advances 2 275 4 132 proceeds of which were used to repay ~US$62mm of indebtedness of ATIL and
Slide 34: Detailed Cash Flow Summary
Detailed Cash Flow Summary (US$ mm) FY15 FY14 9M FY16 9M FY15 Comments Net cash from operating activities increased Net cash flow from operating activities 121.9 40.0 189.1 104.8 in 9MFY16 due to decrease in trade receivables and increase in operating profit before working capital changes and part
Slide 35: Resources Logistics Energy
Ss \ a) Resources Logistics Energy
Adani Transmission — Debt Investor Presentation (March 2016) on 6ix