CESC starts second round restructuring

Kolkata's power utility, CESC Ltd, has embarked on its second round of financial restructuring exercise and has firmed up plans of adding 250MW capacity.

It has decided to raise a total Rs 1000 crore from financial institutions and banks.

The company has entered into talks with its existing lenders for financing its expansion plan and hopes to receive Rs 1,000 crore from some or all of its existing lenders.

The company has also entered into talks with its foreign lenders for receiving funds in form of terms loans.

According to CESC, the fund would be raised either as term loan or refinance loan.

CESC was considering raising a portion of this loan as foreign currency assistance, or either fund and non-fund based working capital facilities.

CESC has raised close to Rs 700 crore from financial institutions including Power Finance Corporation (PFC), Infrastructure Development Finance Ltd (IDFC), UCO Bank, Yes Bank and Andhra Bank as refinance loans.

In a parallel development, its consortium of banks, including ICICI Bank, Allahabad Bank, ABN Amro Bank, have decided to raise their working capital limit by additional Rs 150 crore including Rs 30 crore already provided by Andhra bank.

CESC has earlier roped in PFC for a Rs 321.68 crore term loan which was used for refinance. IDFC for a Rs 222 crore term loans in two tranches of Rs 173 crore and Rs 50 crore respectively.

UCO Bank had provided CESC a Rs 100 crore term loan, while Yes Bank advanced Rs 22.26 crore to the private sector power utility.

The refinance loans has helped CESC reduce its interest burden and enhance bottomline.

CESC said its proposes to embark on a number of initiatives to take advantage of the opportunities in the emerging market for power and allied activities. Augmentation of generating capacity in the licensed area and beyond, expanding its captive coal mining, sale of power in the merchant market were some of the options the company has been exploring for sometime.

The company has also decided to diversify into the business of providing telecommunication infrastructure and networking services.

CESC which made profits this year also declared a 25 per cent dividend for its equity shareholders after a gap of seven year when the company moved off track in 1996-97. CESC had declared a dividend in 1995-96.