The Transmission Corporation of Andhra Pradesh Ltd (APTRANSCO) has decided to hit the debt market with around a Rs 300 crore issue.
UTI Bank's Kolkata office and Smifs Capital Markets have been appointed as the arrangers to the issue.
The fund mobilised through issuance of redeemable, transferable, non-convertible bonds will be employed to support and augment the resources for its ongoing operation and retire high cost borrowings. The corporation is planning substantial level of investment in strengthening the transmission and distribution (T&D) network to make the system self-sustaining as the APGENCO, the state-run power generation company, is expected to increase power generation capacity.
The issue, which has received an A (SO) rating from Crisil, will have three different coupons. For the seven-year bond, the coupon is going to be 10.9 per cent, for the 10-year bond it is 11.3 per cent and for the 12-year bond the rate is going to be 11.6 per cent.
The payment of interest would be disbursed semi-annually and the bond would be listed on the National Stock Exchange. The issue will open on March 1 and remain open till March 23.
The Government of Andhra Pradesh would support the issue. The issue has extended unconditional and irrevocable guarantee of the state government towards the repayment of principal and payment of interest and budgetary support from the Andhra Pradesh government during the entire tenure of the bonds by way of a tripartite agreement between APTRANSCO, Andhra Pradesh government and State Bank of Hyderabad.
The issue would give impetus to the ongoing reform process in the state started in 1998 when the Andhra Pradesh Electricity Reforms Bill was approved by state assembly for restructuring of electricity sector in the state.
APSEB (Andhra Pradesh State Electricity Board) was split into two companies -- the generation utility APGENCO and T&D utility APTRANSCO.
Andhra Pradesh regulatory commission was also set up in April 1999. World Bank has also supported the reform project and extended a loan of Rs 100 crore to fund the investment needs of the sector.
APTRANSCO has inherited about 6,15,014 km of T&D lines catering to about 3,800 high tension and 10 million low tension consumers. In addition to 5,884 mw electricity that APGENCO produces, APTRANSCO can carry capacity equivalent 1,458 mw through its network. The fund would help to augment its capacity further.
