Neyveli Lignite Corp planning to raise Rs.19 bn

August 5th, 2008 - 1:04 pm ICT by IANS  

Chennai, Aug 5 (IANS) The Rs.36.38 billion mining-cum-power company Neyveli Lignite Corp Ltd (NLC) is planning to raise around Rs.19 billion ($452.4 million) through external commercial borrowing (ECB) or bond issue or a mix of both. The fund will be invested in two major projects - expansion of mine II by 4.5 million tonne per annum and setting up of 500 MW power projects at Neyveli and Barsingsar power project in Rajasthan.

“The two projects require an investment of around Rs.63 billion and would be funded with a mix of debt and equity in the ratio of 70:30,” J.N. Prasanna Kumar, chairman and managing director of NLC, told IANS.

The company has already raised Rs.25 billion through a consortium of bankers led by Canara Bank in two tranches with the cost of funds averaging around nine percent.

“We will decide the way forward in two weeks,” he added.

During 2007-08, NLC made a capital expenditure (capex) of Rs.17 billion.

“The capex for next fiscal will be around Rs.10 billion,” Kumar said.

NLC is also building a 1,000 MW coal-based power project at Tuticorin partnering with the Tamil Nadu Electricity Board (TNEB).

The Rs.49 billion project is being implemented by a special purpose vehicle NLC Tamil Nadu Power Ltd, in which NLC holds 89 percent and TNEB holds the balance.

The Tuticorin power plant will buy coal from Mahanadi Coalfields and Indonesia.

“The technical bids for different facets have been opened and are being evaluated. The price bids will be opened in 10-15 days,” said Kumar.

According to him techno commercial discussions have been held with India’s Bharat Heavy Electricals Ltd (BHEL) and Italy’s Ansaldo for the steam-generating package.

Indian power equipment major BHEL is the only bidder for the turbine generator contract.

“For coal handling systems, discussions are being held with L&T (Larsen and Toubro), ThyssenKrupp, and Elecon,” he added.

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