Ahmedabad Electricity Company (AEC) is in talks with a clutch of financial institutions led by the Infrastructure Development Finance Company (IDFC) for raising Rs 200 crore debt.
The company is planning to utilise this amount for funding its capital investment. AEC proposes to invest substantial sums over the next two years in revamping its transmission and distribution system.
The debt could be in the form of term loans or debentures. The company is seeking shareholders' nod at the forthcoming annual general meeting for creating a first charge on its assets for securing the loans. This charge will rank "pari passu with the existing mortgages" the company has said in the notice convening the AGM.
The existing mortgages are in favour of banks, financial institutions, the government of Gujarat and the International Finance Corporation (Washington). Under Section 293 (1)(a) of the Companies Act, 1956, the mortgaging of assets is considered the disposal of property and shareholder nod for such a move has to be obtained through a special resolution.
The Mehtas of the Torrent group have a substantial stake in two power companies in Gujarat--AEC and Surat Electricity Company.
AEC posted a net profit of Rs 16.98 crore in 2001-02 against Rs 23.58 crore in the previous year. Its total income during 2001-02 was Rs 1,064.06 crore against Rs 980.58 crore in the previous year. The turnover of the company crossed the Rs 1,000 crore mark for the first time.
The profit of the company is lower in the 2001-02 owing to the provision of a deferred tax liability of Rs 10.72 crore in accordance with Accounting Standard 22.
