Government approves PFC follow on public offer

The government on Wednesday approved follow-on public (FPO) offer of the state-run lending agency Power Finance Corporation worth about Rs 5,732 crore.

The exact amount to be raised through the offer can be ascertained only after the Empowered Group of Ministers (EGOM) decides the offer price.

The shares of the company were trading at Rs 249.7 a price, down 2.44 per cent from previous close in the afternoon trade on Bombay Stock Exchange (BSE).

"The Cabinet Committee on Economic Affairs (CCEA) today approved the follow on public offer of the PFC," an official statement said here.

The company will also infuse 15 per cent fresh equity by issuing 17,21,65,005 shares of Rs 10, the statement added.

"The fresh equity would be 15 per cent of pre-issue existing paid up capital," it said.

Meanwhile, sources said the FPO is likely to hit the markets in the first quarter of next financial year.

The offer would comprise 5 per cent disinvestment of the government's share in PFC through putting 5,73,88,335 crore shares of Rs 10 on sale.

The government currently holds 89.78 per cent stake in the public sector company. The market capitalisation of PFC currently stands at Rs 28,854 crore.

The company had earlier divested 10 per cent stake through an initial public offering (IPO) in 2007.

After the proposed FPO, government's stake may go down to about 85 per cent.

The statement said that the reservation of equity shares for PFC employees are subject to the limit prescribed for retail investors by SEBI, which will not exceed 0.12 per cent of the issue size.

A discount of 5 per cent of offer price will be given to retail individual investors and eligible employees.

The public offer would help PFC to meet the eligibility requirement of maintaining a CRAR (Capital To Risk Assets Ratio) of 15 per cent for industrial finance company status.

The FPO will also enhance equity base of the company to enable it to meet the growing future investment needs of the power sector.

PFC is a non-banking financial institution that provides loans for various power projects in generation, transmission and distribution sector as well as for renovation & modernisation (R&M) of existing power projects.

The government has set a target of raising Rs 40,000 crore from disinvestment the current financial year, against Rs 25,000 crore in the previous close.

Source: Government approves PFC follow on public offer - Business Today - Business News

Revised cost for Tripura power project gets nod

Agartala, Jan 28: The revised cost estimate of Rs 623.44 crore for Tripura’s 100 MW thermal power project has got the green signal from the union Cabinet Committee on Economic Affairs (CCEA), officials said here on Friday.

“The CCEA headed by Prime Minister Manmohan Singh in its meeting held in New Delhi Thursday approved the revised cost estimate of gas-based power project being implemented by the state-owned North Eastern Electric Power Corporation Limited (NEEPCO) at a cost of Rs 623.44 crore,” a Tripura Government official told reporters.

The power project to be commissioned at Monarchak in Sonamura, bordering Bangladesh, is scheduled to start generating electricity within 36 months of the starting of actual work. The Oil and Natural Gas Corporation (ONGC) will supply natural gas. The official said the power project would contribute to the economic development of the northeastern states by providing 100 MW power and direct and indirect employment to the local population.

“Being a combined-cycle power station using natural gas and water, the plant shall be of high efficiency and also an environmentally compatible project, with negligible emission,” the official stated. According to the official, this power plant would mitigate the problem of power shortage in the northeastern region and the consequent need for import of power, particularly during the winter seasons.

“The power project would improve the hydro-thermal mix in the northeastern region and the country,” the official pointed out. (IANS)

Source: The Sentinel

Cabinet panel nod to Tripura project estimate

NEW DELHI, Jan 27 – The Cabinet Committee on Economic Affairs (CCEA) on Thursday sanctioned revised cost estimate of 100 MW Tripura Gas-based power project amounting to Rs 623.44 crore.

The Project being executed by North Eastern Electric Power Corporation Limited (NEEPCO) is located at Monarchak, West Tripura. The revised cost includes interest amount of Rs. 51.09 crore during construction. The project is scheduled to be commissioned in 36 months from July, 2010.

The project would be completed with a debt-equity ratio of 70:30. While the equity portion shall be met through NEEPCO’s internal resources, the debt portion would be arranged through commercial borrowings, said official sources.

The power generated from the project will be supplied to Tripura. The project being acombined cycle power station by using natural gas, the plant shall be of high efficiency and also environmentally compatible project, with negligible emission. This project will mitigate the problem of power shortage in the NE region and the consequent need for import of power, particularly during the winter seasons. The project will improve the hydro-thermal mix in the NER, said sources.

Source: The Assam Tribune Online