Plans to divest around 26% equity to raise funds
The Karnataka Power Corporation Limited (KPCL), the state-owned power generator, is looking at multiple options to raise up to Rs 5,000 crore to part-fund its ongoing power projects. The company plans to divest up to 26 per cent of its equity to raise the money, a top official said.
“We are in the process of adding 8,200 Mw in the next four to five years for an investment of Rs 40,000 crore, 20 per cent of which will be in the form of equity. To meet this equity requirement we need around Rs 5,000 crore which will be mobilised by divesting our stake up to 26 per cent,” S M Jamdar, managing director, KPCL said. KPCL has an installed capacity of 5,730 Mw.
For year-ended March 31, 2010, KPCL has achieved a provisional net profit of Rs 410 crore. The state government has allocated Rs 500 crore in the state budget for 2010-11 towards the equity requirement of KPCL, same as last year. Presently, KPCL has an authorised share capital of Rs 2,000 crore and the paid up share capital is Rs 1,243 crore. Besides, the corporation has reserves and surplus of Rs 2,630.6 crore as on March 31, 2009.
KPCL has appointed SBI Capital Markets as advisor for this purpose, which is presently studying the market conditions. The company is exploring various options to raise the funds, which include private placement or institutional placement or strategic partners, he told reporters, here today.
“We already have two strategic partners — L&T and BHEL — who are also joint venture partners in two of our upcoming projects. We are open to more such partners,” Jamdar said.
To add further 8,200 Mw capacity, the tendering and work for projects with 4,500 Mw capacities has begun. Recently, the company has issued work order for 800x2 units of thermal power project at Yeramarus and 800 Mw thermal projects at Yedlapur in Raichur district which will be done jointly with BHEL. It has floated tenders for 700 Mw third unit of Bellary Thermal Power Station at Bellary and 1,400 Mw gas-based power project at Bidadi. The work is likely to commence in July this year. KPCL is presently negotiating with the Gas Authority of India Limited (GAIL) for the supply of gas for the Bidadi project.
In addition to these projects, KPCL is in the process of acquiring land for a 1,600 Mw thermal project in Chhattisgarh which will be executed in a joint venture with L&T. The ministry of environment and forests’ clearance is expected by June-end for this project.
KPCL is also awaiting MoEF clearance for the 2,100 Mw gas-based project at Tadadi in Uttara Kannada district. The cost of the project is estimated at Rs 6,000 crore.
Jamdar said the company is in talks with a host of commercial banks for raising debt for all the projects. It requires Rs 32,000 crore as debt for these projects over a period of five years.
