The Hindu Business Line : Tata Power in talks to set up plant in S Africa

CONSISTENT with the Tata group's aspirations of creating global corporations, Tata Power Company, the Rs 7,000-crore electricity producer and distributor is evaluating an opportunity to set up a 500 MW power plant in South Africa.

The African project, for which talks are still at a preliminary stage, is one among many initiatives the company is planning, the Chairman of TPC, Mr Ratan Tata, told shareholders at the company's annual general meeting here today.

"In the coming year, we see ourselves moving outside the staggered Maharashtra State and entering not just other parts of India but also overseas. We are looking at new projects - generation as well as distribution - in not only Maharashtra and the rest of India but also outside the country," Mr Tata told shareholders.

Tata Power's EPC division is also setting up a 100 MW gas-fired captive power plant in Saudi Arabia. TPC also has a 50 per cent equity ownership in the co-generation plant being built for Sahara Petrochemicals Company.

The EPC business called the Power Systems Division had built up an order book of close to Rs 430 crore at the end of the year. It won a $38-million (around Rs 175 crore) contract to set up a transmission line in Bangladesh and also counts Damodar Valley Corporation, Zambia Electricity Supply Company and Power Grid Corporation of India among its major clients.

"We are not only looking at small-sized power plants, but also at large plants, for instance a 1000 MW gas-based plant in North India and a coal-based in Maharashtra," he said.

TPC has budgeted a capital expenditure of Rs 6,000 crore over the next five years to finance new projects, existing businesses, acquisitions and investments in joint venture projects in the power sector. It also sought shareholders' permission to raise $500 million (around Rs 2,300 crore) from the international market, likely in foreign currency convertible bonds.

However, to enable the issue, TPC is restructuring the capital composition. It has sought to increase the equity share capital by creating 71 crore shares of Rs 10 each by cancelling 71 lakh cumulative redeemable preference shares of Rs 100 each. The recast however will not affect the authorised capital, which will remain at Rs 529 crore.

"We want to convert preference shares to equity shares so that when the overseas securities are converted to equity we do not fall short," Mr Tata said.