SMHC plans Rs 330-crore bonds issue
By Praveen Chandran | 05 Apr 2002
Officials with financial institutions say with the state government's standby guarantee in place, the promoters of the project have dropped their earlier plan to offload the 49-per cent equity either to a strategic foreign partner or to domestic financial institutions.
When contacted, an S Kumars official confirmed the development, but was reluctant to divulge more details. Following the withdrawal of the US-based Odgen Energy from the project around two years back, S Kumars was scouting for a strategic partner to fill the Rs 330-crore equity in the project. The promoters had also mooted a proposal with the Industrial Development Bank of India (IDBI) for a possible equity participation in the Maheshwar project.
The officials say the Rs 330-crore bonds issue programme will help the promoters to reduce the project cost considerably, as the dollar component in the new equity structure is very negligible. It is expected that the total cost of the project will come down to Rs 2,234 crore from the original cost of over Rs 2,500 crore.
S Kumars had replaced Siemens AG with Bharat Hevay Electricals Ltd for the supply of electro-mechanical equipment for the Maheshwar project. The project is funded on a debt-equity ratio of 70:30.
The Rs 1, 400-crore debt will be financed by a consortium of 14 banks and financial institutions, including IFCI, IDBI, the Power Finance Corporation, the State Bank of India and Dena Bank, through a mix of rupee-term loans. Leading financial institutions, like LIC, GIC and IDBI, have picked up a 15-per cent stake in the project.
