The beleaguered Dabhol power plant is likely to go public with an initial public offering of about 25 per cent equity shares by the end of the year.
Ratnagiri Gas and Power Pvt Ltd, the joint venture of state-run GAIL India and National Thermal Power Corporation Ltd which owns the 2,150-MW power plant and the adjoining LNG import terminal, plans an IPO to raise Rs 1,000 crore (Rs 10 billion), company Chairman R K Goel told reporters in New Delhi.
"In the first instance, the board of RGPPL will this month consider changing its character from a private company to a public limited one," he said. After that, it will apply to the Registrar of Companies for a certificate for commencement of business as public limited firm and IPO will follow that.
Out of the total share capital of Rs 4,000 crore (Rs 40 billion), promoters GAIL, NTPC, Maharashtra State Electricity Board and financial institutions have so far contributed Rs 2,985 crore (Rs 29.85 billion) and the balance is to be raised through the IPO, he said.
RGPPL plans to use the IPO proceeds to pre-pay the debt it has taken from Power Finance Corporation and NTPC. The firm has taken Rs 350 crore (Rs 3.5 billion) loan from PFC for completion of the power plant and LNG import terminal. NTPC had also sanctioned Rs 500 crore (Rs 5 billion) loan, of which Rs 150 crore (Rs 1.5 billion) has been drawn.
Goel said the IPO will be followed by a Rs 500-crore (Rs 5 billion) private placement of equity shares which was likely to be subscribed by the lenders -- IDBI, ICICI Bank, SBI, Canara Bank and IFCI, which who have wished to convert part of their Rs 7,011-crore (Rs 70.11 billion) term loan into equity.
The Dabhol plant will be fully operational by next month when the third generating unit is commissioned, he said adding that currently, two units were generating about 1,100
lock" id="div_arti_inline_advt">
MW electricity.
Goel said breakwater, which will make the five million tons a year liquefied natural gas import and regassification terminal operate at full capacity, would be ready by the end of 2011.
"By end-April, Dabhol should would be generating 1,700 MW of electricity," he said.
RGPPL plans the IPO after lenders expressed concern over the increase in completion cost of the project.
The completion cost, which was estimated at Rs 870 crore (Rs 8.7 billion) when Indian lenders and a consortium of NTPC and GAIL took over the 2,150 MW gas-fired power plant, was put at Rs 1,960 crore (Rs 19.6 billion) in September 2006 and has now been further revised to Rs 2,144 crore (Rs 21.44 billion), excluding Rs 220 crore (Rs 2.2 billion) for mandatory spares.
Ratnagiri Gas and Power Pvt Ltd, a special purpose vehicle set up by NTPC and GAIL, acquired the assets of Dabhol power project for Rs 8,485 crore (Rs 84.85 billion) in 2005.
This was financed by term loans of Rs 7,011 crore (Rs 70.11 billion) and equity of Rs 1,474 crore (Rs 14.74 billion), out of total equity contribution of Rs 1,500 crore (Rs 15 billion).
Besides providing the term loan, Indian banks and FIs contributed Rs 500 crore (Rs 5 billion) toward the project's equity. NTPC and GAIL pumped in Rs 500 crore (Rs 5 billion) each as initial equity. NTPC, GAIL and MSEB further pumped in Rs 1,200 crore (Rs 12 billion) equity last year.
The project was originally estimated to be completed during September-November 2006 but has been delayed due to various reasons, including non-availability of gas.
Two of the three power blocks are currently operating and the third is expected to commence operations in February/March while the LNG facility (excluding breakwater) is expected to be completed in the later half of 2008.
© 2025