NEW DELHI, June 13: The Foreign Investment Promotion Board (FIPB) has cleared DLF Power Ltd's proposal to privately place convertible preference shares worth $11 million with the Commonwealth Development Corporation (CDC).The 16 per cent fully and compulsorily-convertible preference shares will have a face value of Rs 100 each and the money will be used to part finance the company's power projects.
The preference shares will be compulsorily converted into ordinary equity between three to seven years of the first subscription on the basis of the conversion price arrived at.
After the allotment of preference shares, the company's equity capital base will expand to Rs 75.32 crore from the existing Rs 69.32 crore.
At present, there is no foreign equity or preference share participation in the company. The preference share participation of the company will also go up substantially to Rs 43 crore.
The company, which had got the necessary board resolutions, had been advised by the Reserve Bank of India(RBI) to approach the Secretariat of Industrial Approvals (SIA) to get the necessary approvals.
The company's decision to give 16 per cent stake to CDC was supported by the various concerned ministries including power, petroleum and natural gas and coal.
DLF Power is in the process of setting up six power plants in Bihar, Assam and Karnataka with a total capacity of about 90 mw at an estimated cost of Rs 380 crore.
The company is setting up three thermal power plants of 11mw each based on coal washery rejects for supply of power to the Central Coalfields Ltd at Rajrappa and Gidi in Bihar and to Bharat Coking Coal Ltd at Madhuband in Bihar.
The company is also setting up a 32.5 mw liquid fuel-based power plant at Tunkur in Karnataka for the Karnataka State Electricity Board (KEB).
The projects have already been appraised by the Industrial Finance Corporation of India (IFCI). In the Rs 76-crore equity capital, promoters contribution will be Rs 57 crore and Rs 19 crore will be raised from the public.IFCI is also the principle lender among the FIs and banks to the company's power projects. The total debt planned to be raised through the Industrial Finance Corporation of India and banks is over Rs 100 crore.
The company had, some time back, also announced plans to issue optionally convertible debenture (OCD) of Rs 119 crore of which the promoters have the option to contribute Rs 12 crore and the remaining Rs 107 crore was to be issued to the public.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
