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Jai Kumar NR
NEW DELHI, DEC 7: Gujarat Industrial Power Company is planning to issue Rs 86-crore worth of partly convertible preference shares to Asia Infrastructure Mezzanine Capital, a foreign infrastructure fund, on preferential basis.
According to a company official, this will pave the way for Asia Infrastructure Mezzanine, a part of Prudential Asia Capital Market, to pick up equity stake in Gujarat Industrial Power Company on conversion of preference shares in future. Of the total amount of Rs 86-crore, 60 per cent will be converted into equity shares and the remaining part will be non convertible debentures (koka portion). The company board which met on November 28 has approved the proposal.
The company also plans to issue preference shares worth Rs 53 crore to Indian shareholders. The conversion price will be determined on the basis of SEBI formula for preferential offer. The GIPC share on the Bombay Stock Exchange is currently hovering around Rs 24.
The preferential offer is part of a fundmobilisation plan for setting up an ambitious 250 mw lignite-based power project (including mining) near Surat in Gujarat. The total cost of the project is estimated to be around Rs 1530 crore. The company is also issuing Rs 15.5 per cent 112.7-crore non convertible debentures as well as 11 per cent NCDs of Rs 161 crore.
Apart from the issue of preferential shares and NCDs, the project cost is being met from term loans to the tune of Rs 1050 crore and the balance from internal accruals.
The lead financial institutions for GIPC, IDBI, is advancing a major part of this term loan and some of the banks in the country are arranging the balance amount. After the conversion of all preference shares, the equity of the company may swell by around Rs 120 crore, based on the current market price. The promoters, Gujarat State Fertilisers Corporation, Gujarat Alkalies and Chemicals Ltd and Gas Authority of India Ltd, currently hold nearly 68 per cent of the company's paid up capital of Rs 74 crore.
The company'searlier move to raise Rs 125-50 crore equity at around Rs 28 through overseas private placement had backfired. The foreign infrastructure funds had turned down the private placement offer as the GIPC share fell to Rs 24 after the announcement of offer. The debt equity ratio of the project is around 70:30. GIPC has two thermal power plants situated at Vadodara.
After setting up of the 250 mw power project, the company will sell the power to Gujarat State Electricity Board. The company, which has arranged most of the term loans, is in the process of implementing the project.
During the fiscal 1998, the company recorded a net profit of Rs 30 crore (sales of Rs 167 crore) against the previous year's figure of Rs 23 crore (sales Rs 120 crore). In fiscal 1997-98, the company's 145 mw power station achieved an all-time high plant load factor of 89 per cent and 160 mw Baroda expansion project commenced commercial operations.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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