XL Telecom enters into Power Generation

XL Telecom & Energy Ltd has announced that the Company has decided to enter into POWER GENERATION SEGMENT with initial investments in Spain, the current global destination for Grid Connected Solar Energy.

Saptashva Solar Ltd, a wholly owned subsidiary of the Company will establish a series of "Solar Farms" for Power Generation in Spain with a target for the first year of about 28 MW capacity. The medium term target is to install close to 200 MW of these farms in Spain and surrounding Portugal alone. Other countries are also being explored for establishing such farms to avail of the benefits offered and to go up the solar "value chain".

The solar farms proposed to be established in the first year would require a total investment of about Euro 168 Million or Rs 10 Billion. The project is expected to have debt equity ratio of 1:4 and would largely get funded by local banks. As the investments are being made in the wholly owned subsidiary of XL Telecom & Energy Ltd, the Company do not envisaging any dilution in the parent Company on account of this investment.

Based on the current policy and legislation, the project is expected to have 25 year PPA from the local Utility Company. Saptashva would generate on first full year of operations with this capacity about Euro 17.740 Million or Rs 1 Billion with 20% Margins for next 25 years. The first Solar Farm of 2.3 MW would be implemented before March, 2008 and the balance would get installed by Dec 2008.

The proposed model would have multi fold benefits to the Company, first it will give opportunity to be the only player to focus on alternative power generating player in the world, second it will ensure the Company moving in the Solar Value chain from the current Solar Photovoltaic Panel supplier to Total System Integrated Player, which mean substantially higher per watt realization going forward, while lastly it will create larger market for its parent Solar Production.

Spain offers significant opportunities in Solar Power Generations with its target of about 1,200 MW solar farms every year. Spain Government supports the investments in Solar by offering land on a long lease basis and also subsidized long term Bank loans.

XL Telecom gets orders for solar panels

XL Telecom & Energy Ltd has announced that the Company has received fresh ORDERS VALUED OVER Rs 658 Millions for Export of Solar Panels to EU.

SOLAR ENERGY

Company has been focusing in the NON CONVENTIONAL ENERGY sector since 1994 and has recently refocused on Export Market of Solar Panels of higher Capacity for niche Grid Connected Segment. Company has been investing heavily over the last 18 months in its efforts to get orders from Europe and emerging US Market for its products.

The Company has been successful in securing additional orders worth Rs 658 Million for the supply of 40 MW Solar Panels to the EU, and the customer a large Power Utility Company in Europe.

The Company has recently executed 1 MW Solar Panel orders valued over Rs 16 Crores in the Quarter ending September 30, 2007.

The Total Pending Order Book for the Export of Solar Panels with this Order stands at Rs 2.635 Billions which is equal to 16 MW Solar Panels. The Company is bullish on entering as a vendor with this large Power Utility Company and is confident that over the period the Customer engagement will be extremely fruitful with multiple repeat orders. The Company is working smooth execution of these orders with in the financial year ending of June 30, 2008.

Company has recently concluded its FCCB Issue and has raised about US$ 40 Millions for part funding its establishing of 120 MW Solar Cell Manufacturing Plant along with Expansion of Module Making capacity by another 40 MW fully automated plant in the SEZ with a total CAPEX of US$75 Million or Rs 3 Billions.

XL Telecom FCCBs

XL Telecom & Energy Ltd has informed that with regards to US$35,000,000 zero coupon Unsecured Foreign Currency Convertible Bonds due 2012 (Subject to an over allotment option of up to an additional US$5,000,000 of such bonds) ("the Bonds"), the Company has raised US$35 million by way of issuing Foreign Currency Convertible Bonds in the international markets. The Closing Date for the Issue is October 22, 2007 and the Foreign Currency Convertible Bonds will be listed on the Singapore Stock Exchange

Elara Capital Plc, London has been the Lead Manager for the Issue and Prabhudas Lilladher Advisory Services Pvt Ltd was the Indian Financial Advisors.

The Board has issued Global Certificate representing US$35 million in aggregate principal amount of Bonds.

HDFC Securities - XL Telecom

HDFC Securities has a target price of Rs 190 to 215 on XL Telecom.

They advise a stop loss of Rs 145.

The current market price is about Rs 158