DVC revives Rs 1600-cr bond issuance, seeks govt guarantee

Damodar Valley Corporation has revived its Rs 1600-crore bond issuance plan in the current fiscal and sought the Centre's guarantee.
"We had approached again to government of India for guarantee on Rs 1,600 crore for bond issue in 2015-16. Last year, we had sent a proposal to the union government for Rs 1,600 crore bonds. We were given permission but without government guarantee on Rs 800 crore and it did not materialise," DVC chairman Andrew WK Langstieh told PTI.
Debt-laden DVC wants to service some of its short-term debt and funding ongoing projects.
"We are looking to raise fund via issuing bond subject to government approval and government guarantee. We want to service some of the short-term debt with the proceeds," he said.

DVC had raised bonds totalling to Rs 7,640 crore till 2012-13.
In 2010-11 it was Rs 640 crore, in 2011-12 it was Rs 4,400 crore and in 2012-13 it was raised to Rs 2,600 crore, sources said.

Government had rendered its support by offering guarantee in the last two issuances helping the corporation in raising funds at lower cost.
Sources said DVC's short-term borrowing has swollen to Rs 4,200-4,300 crore, which is a matter of concern for the company.
DVC could have saved at least 100 basis points in interest cost if it could have raised the funds through bonds.

Total annual interest burden of DVC is about Rs 1,200 crore, while average revenue was Rs 800 crore per month.
However, the revenue and cash flow situation has improved and in June it was Rs 1,380 crore, DVC officials said.