Rel Power to raise Rs 25,000 cr debt

Reliance Power, a part of the Anil Ambani group, will raise over Rs 25,000 crore for financing six projects.

This is in addition to the company's mega public issue, for which it has submitted the draft red herring prospectus with the market regulator, Sebi, yesterday.

The company, which is described in the prospectus as the primary vehicle of the Ambani group in power generation, has mandated Macquarie Advisory, ABN Amro and Deutsche Bank for raising syndicated loan of nearly Rs 24,000 crore.

The three financial institutions will raise $2 billion (Rs 8,000 crore) each. This is going to be the largest fund-raising exercise through this route this year.

This fund, along with the proceeds of the public issue, will be utilised in the six projects, namely, the 600 mw Rosa phase-I, 600 mw Rosa phase-II, 300 mw Butibori, 3,960 mw Sasan, 1,200 mw Shahapur and 400 mw Urthing Sobla project.

The cost of the six projects is estimated to be Rs 31,789 crore. The company will finance 80 per cent of the amount through debt and the remaining 20 per cent through equity.

So the equity contribution for the projects should be Rs 6,148 crore. However, bankers said the public issue would generate more than this and would take care of financing general corporate expenses.

The public issue will offer 1.3 billion shares, representing 11.5 per cent stake in the post-issue paid-up equity, of Rs 2 each through an entirely book-built process . Of this, the promoters "� Reliance Energy and AAA Projects "� will subscribe to 160 million shares, or 1.4 per cent stake. The promoter firms will bring in funds a day before the bid opens.

The issue is expected to raise Rs 8,000-10,000 crore. It will provide easy payment options to lure retail investors. Post-issue, the paid-up equity capital will go up to Rs 2,260 crore from the existing Rs 2,000 crore.

The public shareholding, post-issue, will be less than 10 per cent. Reliance Energy and AAA Projects will hold 45 per cent stake each.

Reliance Power has changed its name several times. Incorporated in January 1995 as Bawana Power, it changed its the name to Reliance Delhi Power in the next month.

The company was rechristened Reliance EGen in January 2004, which was again changed to Reliance Energy Generation Pvt Ltd in two months. It left the Pvt tag from its name in March 2004. Ultimately, it became Reliance Power in July this year.