Adani Energy Solutions Ltd · NSE:ADANIENSOL
Adani Energy Solutions — Adani Transmission — Debt Investor Presentation (November 2019)
35 slides from Adani Energy Solutions's debt investor presentation, November 2019
Slide 1: Adani Transmission Limited Roadshow Presentation
November 2019 Adani Transmission Limited Roadshow Presentation STRICTLY CONFIDENTIAL
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: Summary Terms of the Notes
Summary Terms of the Notes Issuer Adani Transmission Limited Obligors The Issuer, Adani Transmission (India) Limited (ATIL) and Maharashtra Eastern Grid Power Transmission Company Limited (MEGPTCL) Expected Issue Ratings BBB-/Baa3 (Fitch/Moody’s) (S/M/F) Format RegS / 144A Ranking Senior s
Slide 4: Contents
Contents 1. Adani Group Overview 2. ATL Obligor Group 3. Credit Highlights 4. Summary 5. Appendix 3
Slide 5: Adani Group Overview
1 Adani Group Overview STRICTLY CONFIDENTIAL
Slide 6: Adani – Leading Infrastructure and Utility Portfolio
Adani – Leading Infrastructure and Utility Portfolio Transport & Logistics Portfolio Utility & Power Portfolio 62.3% 100% 100% 75% 75% 75% 75% * Adani Adani Adani Green Adani Gas APSEZ AAPT SRPCL Transmission Power (AGEL) (AGL) (ATL) (APL) Port & Port Rail 75% Transmission & IPP Renewables Gas Logis
Slide 7: Adani – Repeatable, Robust and Proven Business Model
Adani – Repeatable, Robust and Proven Business Model… Post Phase Development Operations operations Origination Site development Construction O&M and Capital Mgmt technology • Return based • Resource • Template based • RONC based • Reduction of cost disciplined bidding assessment design analytics and
Slide 8: Applied Consistently to Drive Value
…Applied Consistently to Drive Value Key Business Model Successfully Applied Across Infrastructure and Utility Platform Attributes Development at scale and within time and budget Largest Private India’s Largest Longest Private HVDC 648 MW Ultra Mega Largest Single Location integrated Utility in Comm
Slide 9: ATL – Business model applied to develop largest Private T&D Company in India
ATL –Business model applied to develop largest Private T&D Company in India Execution Strength and Pan India 11,478 ckms operational / Presence 3,139 ckms under construction ~INR 271 bn / US$ 3.9 bn Presence Across Sub-Stations - 38 Nos. Regulated Asset base(3) (Fully built) 9 States Capacity - 25,7
Slide 10: ATL – Obligor Group
2 ATL – Obligor Group STRICTLY CONFIDENTIAL
Slide 11: ATL – Asset Portfolio at a Glance
ATL – Asset Portfolio at a Glance Obligor Group Assets Adani Transmission Limited Other Operational Green Field ATIL MEGPTCL Operational AEML USPP Assets1 Assets1 Assets1 Section 62: ROA Section 62: ROA Transmission Section 63: TBCB Integrated Utility Brief Asset Description ATIL and MEGPTCL asset
Slide 12: ATL – leading T&D company including a superbly performing ATL OG
ATL – leading T&D company including a superbly performing ATL OG EBITDA and Project Types Consistent performance of Obligor Group FY16 Debt Service Cover Ratio(1) Operating Greenfield 2.4x 2.4x ROA TBCB 1.8x 1.9x 1.6x 2 subsidiaries 5 subsidiaries US$ 287 mn US$ 79 mn Mar-17 Sep-17 Mar-18 Sep-18 Mar
Slide 13: ATL OG – Mature High Performing Assets
ATL OG – Mature High Performing Assets License Remaining COD Length License Asset Regulator Period3 License Operational Performance Date Ckms Date (Years) Life Mundra - CERC 25 + 10 Jul-2009 868 Jul-2013 ~28 years 99.9% 99.9% 99.8% 99.6% Dehgam 1.4% 1.3% 1.3% 1.1% 98.5% 98.5% 98.5% 98.5% FY17 FY18 F
Slide 14: ATL OG – Structural Features
ATL OG – Structural Features Obligor Group Assets Adani Transmission Limited Other Operational Green Field ATIL MEGPTCL Operational AEML USPP Assets Assets Assets Section 62: ROA Section 62: ROA Transmission Section 63: TBCB Integrated Utility Pool Key Terms Covenant Structure • No Greenfield Risk •
Slide 15: Operating in a robust regulatory framework tested over 20 years
ATL OG – Operating in a robust regulatory framework tested over 20 years Electricity Act (EA), 2003 Ministry of Power Advisory Regulatory Developers Statutory Bodies (MoP) State and Central Central Electricity Central Electricity Private / Public Private National Load Ministry Authority Re
Slide 16: Tariff Determination and Regulatory Protection
ATL OG – Tariff Determination and Regulatory Protection Section 62 Tariff Determination Formula Annual Transmission Revenue for Each Project Annual Fixed Costs (INR mn) H1FY20 Incentive (Penalty) ✶ O&M Costs Based Regulations O&M Costs 864.3 Incentive on Actual Depreciation 2715.2 Availability v
Slide 17: Investor Protections and Credit Highlights
3 ATL OG – Investor Protections and Credit Highlights STRICTLY CONFIDENTIAL
Slide 18: ATL OG – Asset details
ATL OG – Asset details Asset Regulator Remaining EBITDA (FY 19) Location of Assets License (INR Mn) Life Mundra - Dehgam CERC ~28 years 6687.5 Mundra - Mohindergarh CERC ~30 years 909.5 Central Pool Assets 7597.1 (45.4%) Tiroda – Warora MERC ~28 years 1019.1 B Tiroda - Aurangabad MERC ~25 years 8119
Slide 19: Standard Project Finance Security and Covenant Package
ATL OG – Standard Project Finance Security and Covenant Package No capex for new projects to be undertaken in the Obligor Group Cash Waterfall Mechanism No Greenfield Capex outside of Obligor Group limited by LRA provisions Risk New projects can be added to Obligor Group only after they become
Slide 20: Debt sizing limited by underlying performance
ATL OG – Debt sizing limited by underlying performance A three part Debt sizing covenant Backstop protection - Illustration ATIL MEGPTCL (US$ mn) EBITDA(2) All Senior Debt FY19 payments covered 123 116 by regulated EBITDA License 1 2 Expiry Mar- Sep- 37 35 Debt Sizing Backstop based on linked to (We
Slide 21: EBITDA based WALL ensures sturdy protections
ATL OG – EBITDA based WALL ensures sturdy protections Key Risks Structural Protections Change in • All debt serviced from forward looking regulated EBITDA only 100% nature of Regulated A • Any change in structure of EBITDA will reduce WALL and EBITDA EBITDA accelerate senior debt amortizing profile
Slide 22: Senior Debt tenor Linked to License Life by covenant
ATL OG – Senior Debt tenor Linked to License Life by covenant Mundra – Completed Assets with Minimal Transmission lines Mundra – Dehgam Tiroda – Warora Tiroda – Aurangabad Mohindergarh Ongoing Maintenance Regulator CERC CERC MERC MERC License Period 25 years +10 years 25 years +10 years 25 years +10
Slide 23: Special provisions to protect the RoA nature of the OG
ATL OG – special provisions to protect the RoA nature of the OG Reserve for any regulatory capital expenditure of Obligors Capex reserve accounts ranks just after the senior debt payments in the cash waterfall Ensures OG assets are fully maintained as per regulatory requirements Fully funds th
Slide 24: Detailed and Enhanced Information Covenant
ATL OG – Detailed and Enhanced Information Covenant Basic Financial and Business Information Issuer to deliver: o Unaudited (semi-annual period) /Audited (annually) aggregated financial statements prepared in accordance with the Accounting principle which consist of: Financial Position Financi
Slide 25: Maintained IG Rating through aggressive growth phase
ATL OG – Maintained IG Rating through aggressive growth phase Ratings BBB- / Stable Baa3/ Stable Note’s Structural Enhancements ATL’s predictable cash flow Solid growth record Company’s solid operating track record Availability linked revenue visibility Sizable asset portfolio Supporti
Slide 26: ATL OG Group – An excellent investment opportunity
4 ATL OG Group – An excellent investment opportunity STRICTLY CONFIDENTIAL
Slide 27: An Excellent Investment Opportunity
ATL OG – An Excellent Investment Opportunity Well defined regulatory framework with established & predictable tariff policy framework (operating since 1998) Stable regulatory Building block approach with full cost pass through (RoA model) Framework Payment pooling mechanism and credit protecti
Slide 28: Appendix
5 Appendix STRICTLY CONFIDENTIAL
Slide 29: ATL Asset Portfolio at a Glance
ATL Asset Portfolio at a Glance Adani Transmission Limited 100% 100% 100% 74% (1) 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% ATSCL & WTGL, PPP Ghatam- Obra-C WRSS – Bikaner – ATIL MEGPTCL AEML ATBSPL ATRL RRWTL CWRTL STL NKTL FBTL MTSCL WTPL 8/9/10 pur Badaun XXI (A) Khetri Mun
Slide 30: ATL Board and Management Team
ATL Board and Management Team Strong Sponsorship Managing Director Independent Directors Mr. Gautam S. Adani Mr. Rajesh S. Adani Mr. Anil Sardana Mr. K. Jairaj Dr. Ravindra H. Mrs. Meera Shankar (Chairman) (MD and CEO) Dholakia Skilled and Experienced Management Team Mr. Anil Sardana Mr. Kaushal Sha
Slide 31: ATL OG - Profit and Loss Summary
ATL OG - Profit and Loss Summary Particulars (US$ mn) H1FY20 FY19 FY18 FY17 Revenue from Operations 135 264 451 311 Revenue from sale of traded goods 0 119 127 113 Other Income 11 32 21 12 Finance Costs 53 106 126 139 Depreciation & Amortization 40 80 87 84 Purchase of stock-in-trade 0 118 127 113 O
Slide 32: ATL OG - Balance Sheet and Cash Flow Summary
ATL OG - Balance Sheet and Cash Flow Summary Particulars (US$ mn) H1FY20 FY19 FY18 FY17 Tangible Assets 1,117 1,158 1,341 1,371 Long-Term Loans and Advances 21 23 19 17 Other Non-current Assets 942 884 699 87 Cash and Bank Balances 111 29 88 56 Other Current Assets 231 236 174 235 Total Assets 2,423
Slide 33: ATL OG - Capitalization and Debt Maturity Profile
ATL OG - Capitalization and Debt Maturity Profile Capitalization as on 30-Sep-2019 Senior Debt Maturity Schedule as on 30-Sep-2019 (US$ mn) As on 30-Sep-2019 (US$ mn) As on 30-Sep-2019 Equity Share capital 773 10 Yrs US Dollar Bond 500 Reserves and surplus 456 Rupee NCD 327 Total shareholders’ funds
Slide 34: Backstop Mechanism – Ensuring Debt Servicing Capability
Backstop Mechanism – Ensuring Debt Servicing Capability Backstop Calculation done on a semi-annual basis on the Test Date i.e. March 31 and September 30 to determine the Weighted Average License Life (WALL) per the formula below: Weighted Average Licence Life (WALL) = ∑(EBITDAi * Li) / ∑EBITDAi
Slide 35: Slide 35
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