Poompuhar Shipping Ltd, a government of Tamil Nadu undertaking, is likely to come out with a bond issue aimed at raising funds to the tune of Rs 30-50 crore.
The issue is likely to be completed through the private placement route once the company is rated.
"There is a proposal to come out with a bond issue, but a final decision is yet to be taken,'' a senior Poompuhar Shipping official said. Company officials, however, declined to reveal details on the proposed issue.
Besides meeting the working capital requirements, funds from the bond issue are likely to be used to conduct repairs on the company's fleet of ships. Proceeds from the issue will also be used to retire high-cost debt taken from financial institutions (FIs), it is learnt. Negotiations are currently on with FIs.
Poompuhar Shipping currently owns three ships which are used to move coal from coal fields to the Tamilnadu Electricity Board's (TNEB) power plants in the state.
Government sources indicated that the company was in the process of resolving some pending issues regarding payments due from Tamilnadu Electricity Board.
Work on the float will be speeded up once the pending issues are resolved, they indicated.
Most of Poompuhar Shipping's revenues come from the Tamilnadu Electricity Board.
Private placement of bonds is becoming a popular fund raising route with Tamil Nadu government undertakings.
The Tamilnadu Electricity Board had come out with a Rs 100-crore issue last month.
Not only was it fully subscribed in a short time, but the greenshoe option of another Rs 100 crore was also subscribed before the issue was closed.
The Tamilnadu Industries Development Corporation (Tidco) and the Electronics Corporation of Tamilnadu (Elcot) which are jointly promoting a state-of-the art software technology park in the state, are also planning to raise about Rs 265 crore through bonds.
