Neyveli Lignite to raise Rs.18.5 bn

January 2nd, 2009 - 5:33 pm ICT by IANS  

Chennai, Jan 2 (IANS) The Rs.36.38-billion ($744 million) mining-cum-power company Neyveli Lignite Corp (NLC) will raise Rs.18.5 billion to fund its expansion projects.The company’s board has sanctioned raising Rs.5 billion through private placement of secured non-convertible taxable bonds with an option to retain over-subscription up to Rs.1 billion and Rs.12.5 billion through a mix of rupee term loans, external commercial borrowing (ECB), and issue of bonds in one or more tranches.

The funds will be used to meet the capital expenditure relating to expansion of its Mine-II by 4.5 million tonne per annum 9 (mtpa), 500 MW thermal power plant at Neyveli, as well as the 2.1 mtpa mining and power plant (250 MW) at Barsingsar in Rajasthan.

The total project cost is estimated around Rs.66 billion and will be funded with a debt-equity mix of 70:30.

“The private placement of bonds of Rs.5 billion will be in June and we hope to do that at an interest rate that is slightly lower than 9 percent,” NLC finance director J.N. Prasanna Kumar told IANS.

He said the remaining Rs.12.5 billion will be raised in phases when the payments to vendors are due.

“The first instalment of around Rs.6 billion will be raised sometime this June-July and the next tranche will be around January 2010,” Kumar said.

NLC has already raised around Rs.28 billion, Rs.25 billion through a consortium of bankers and Rs.3 billion through the ECB route.

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

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