"We are committed to the supply of coal to KSK Energy Ventures for its Wardha Chhattisgarh power plant," a senior official in the Gujarat government told PTI.
KSK Energy Ventures had entered into a coal supply and investment agreement with Gujarat Government-promoted GMDC in 2006, under which the Wardha Special Purpose Vehicle (SPV) is entitled to seven million tonne of coal per year from the Morga-II coal block at mutually agreed upon prices, starting 3 years from the beginning of commercial mining of the block.
The Hyderabad-based firm is coming out with its initial public offer to raise up to Rs 882 crore to part finance its investment in the SPV Wardha Power Company for the 1,800 Mw coal-based thermal power plant in Chattisgarh.
The company's issue of 3.46 crore equity shares would open on June 23 and close on June 25. The price band for the IPO has been fixed between Rs 240-255 per share, the company said here.
In 2006, the company had also entered into another agreement with GMDC for exploitation of coal blocks to be allocated by the Central government to GMDC, for which the company would pay a facilitation fee for every ton of coal utilised from the blocks, as per information available in KSK Energy Ventures' offer document.
Further, under the terms of the agreement, GMDC has the right to invest for up to 26 per cent stake in the Wardha SPV. GMDC shares closed down over 5 per cent at Rs 287.80 on the Bombay Stock Exchange today.
