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Home News Power Sector News Tata Power to raise Rs.2,000 crore via rights issue

Tata Power to raise Rs.2,000 crore via rights issue

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Tata PowerTata Power Co. Ltd on 28-02-2014, said it is planning to raise Rs.2,000 crore through a rights issue of equity shares, five days after the Central Electricity Regulatory Commission (CERC) allowed compensatory tariff of Rs.0.524 for every unit of electricity generated from its Mundra plant.
In a filing to BSE, Tata Power said its board of directors at their meeting on 27 February has approved raising funds upto Rs.2,000 crore by way of a rights issue of equity shares of face value of Rs.1 each, subject to all applicable statutory and regulatory approvals.


"The terms and conditions of the rights issue including the rights entitlement ratio, the issue price, issue size, record date, timing of the rights issue and other related matters shall be decided subsequently by a duly constituted committee of the board," Tata Power said in the filing.
The continuing losses at Mundra Ultra Mega Power Project (UMPP) have led to stress on Tata Power's balance sheet. The waiver on financial covenants relating to this project had expired on 30 June 2013 and the management was negotiating with lenders, according to the notes to accounts of its September quarter earnings.
Last Saturday, CERC had allowed a compensatory tariff of Rs.0.524 for every unit of electricity generated from Mundra plant and this tariff is for the period beyond 1 April 2013.
On Thursday, Press Trust of India reported that the CERC ruling will help in reducing Mundra project's annual losses by Rs.1,100 crore. The 4,000 megawatt Mundra UMPP, located in Gujarat, is estimated to be incurring a loss of Rs.1,500 crore annually, mainly due to a rise in the price of Indonesian coal that is used to fire the plant, the news agency reported.
In a related development, Tata Power said on Thursday that it has agreed to sell a 30% stake in its Indonesian subsidiary, PT Mitratama Perkasa, to Indonesian conglomerate Bakrie Group for $120 million.
The stake in Mitratama Perkasa is held by another Tata Power subsidiary in Indonesia, PT Sumber Energi Andalan Tbk, which signed the deal with Bakrie Group, the company said in a filing to BSE on Thursday.
"Keeping the under-recovery challenges in Mundra UMPP operations and cash flow concerns in mind, we have also signed an agreement to exit from PT Arutmin Indonesia to get additional cash flow and to reduce our consolidated debt," Anil Sardana, managing director, at Tata Power had said early this month while announcing the December quarter financial results of the company.

Source- Mint

 

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