The Krishna Bhagya Jala Nigam Ltds (KBJNL) Rs 125 crore bond issue on a private placement basis opened yesterday. The Nigam has been allowed to retain Rs 280 crore.
The issue is a part of its plan to raise Rs 3080 crore through market borrowings to fund the Rs 6,883.55-crore Upper Krishna project. The project consists of construction of two dams on river Krishna and setting up of a 297 mw power plant.
A township, designed by Charles Correa, will also be built as part of a rehabilitation programme from the project fund, a state government official said. The township is expected to cost Rs 520 crore
More From This Section
The official said the current bond has been guaranteed by the Karnataka government and it carries a fixed rate of interest of 15.75 per cent, payable every six months. Its annualised yield will be 16.37 per cent. It is expected to be listed on the national stock exchange with call option at the end of five years. The bond has received an A(SO) rating from Crisil. KBJNL has already raised over Rs 1,300 crore through six bonds, including a public issue worth Rs 250 crore in March, 1996. The Nigam mopped up Rs 350 crore through the public issue and was allowed to retain Rs 300 crore, the official said.
The World Bank has pumped Rs 545 crore into the project, with the state government giving another Rs 1,308.84 crore till October, 1997, the official said. The project envisages utilisation of 173,000 million cubic feet of water. It consists of two stages, with stage one expected to be completed in three phases. The project is in progress and is expected to be completed in two to three years. Rs 2,798.24 crore have been spent on the project.
The Nigam floated its first bond worth Rs 150 crore through private placement in September, 1995. It was allowed to retain Rs 180 crore from the funds it mopped up through the bond. The Nigam tapped the market through a public issue worth Rs 250 crore in March 1996. It was permitted to retain Rs 300 crore out of Rs 350 crore it mopped up.
To retain the remaining funds mopped up from the public issue, another bond worth Rs 25 crore was floated in October 1996. The same month, another bond worth Rs 150 crore was floated and the company allowed to retain Rs 184.33 crore.
In May, 1997, a bond worth Rs 250 crore was floated. The company managed to mop up Rs 403.975 crore and was allowed to retain the entire amount.
In February, 1997, the company floated a bond worth Rs 100 crore and was able to retain Rs 125 crore.
The company has been authorised to sell water and recover revenues from individuals and groups of farmers, including those in the command area development authority, towns, city municipalities and industries.