To dilute 15% to private equity investors by January 2009.
Bhima Cements Limited (formerly Ckoramaandel Cements Limited), a Hyderabad-based cement and ready-mix concrete producer, is lining up an investment of about Rs 50 crore for setting up five wind power stations in Anantapur district of Andhra Pradesh. The company will be using this wind power for captive consumption at its cement manufacturing facility in Nalgonda.
“We have already issued a letter of intent (LoI) to Suzlon Energy for executing the wind power stations, each with a 1.5 Mw capacity, on a turnkey basis. Of the total investment, 70 per cent will be pooled in through debt and the rest through internal accruals. The project is expected to be fully operational by March 2009,” Ramesh Chandro, managing director of Bhima Cements, told Business Standard.
Bhima Cements already has three wind power stations in Tirunelveli district of Tamil Nadu with a combined capacity of 4.5 Mw, which the company is selling to the state electricity board for Rs 2.90 per unit. It will look at expanding the wind power capacity in Tamil Nadu during the next financial year, when the open access system is expected to come into existence, he said.
The company has also embarked on a Rs 700-crore brownfield expansion of its production capacity at Nalgonda to 2.4 million tonne a year in two phases spanning the next two years. The first phase, entailing an investment of Rs 135 crore, will add 900,000-tonne per year to the existing 120,000 tonne capacity. The first phase will be completed by March 2009.
Chandro said the second phase will add 1.5 million tonne per year at an outlay of Rs 565 crore. Of this, Rs 100-120 crore would be raised through private placement, Rs 400 crore through debt and the rest from promoters and internal accruals. Commercial production of the second phase will commence from June 2010.
“We are currently in talks with a few private equity investors and a deal is likely to be closed by January 2009. This will dilute our equity by 14-15 per cent,” he said. Bhima Cements is at present focusing on Andhra Pradesh for cement supplies. Post-expansion, it will also address markets in Karnataka, Tamil Nadu, Kerala, Orissa and Maharashtra.
The company reported a net profit of Rs 4.23 crore on revenues of Rs 22.19 crore for the first quarter ended June 30, 2008. The scrip of the company, which went public in 1986, is currently trading at around Rs 65 per share of Rs 10 on the BSE.
