The Hindu Business Line : Phillips Carbon Black studying options to raise funds for power plant

PHILLIPS Carbon Black Ltd, an RPG group company, is studying several options for raising approximately Rs 35-40 crore for its proposed 30-MW power plant contiguous to its factory at Durgapur in West Bengal.

According to an RPG group source, two options are being contemplated. First, it can be either a preferential allotment or a private placement.

The second option is a foreign currency convertible bond (FCCB). If the fund is raised in foreign currency it is likely to be approximately around $8-10 million.

The official said though nothing had been finalised, it was likely to be either a preferential allotment or a private placement. "If this instrument is utilised then the funds are raised purely as equity and from the first day, the debt-equity ratio of the company improves," the official said.

He said there is a tinge of uncertainty attached with the FCCB instrument. "Here you will have to depend on the market rates at the time of conversion. If the rates fall, the conversion is delayed," he added.

Cost of project: The total cost of the Durgapur power project has been pegged at Rs 110 crore. Of this, Rs 35-40 crore will be equity and the rest debt.

When asked if a merchant banker had been finalised, the official said it would happen within the next few days. He was not sure whether the fund would be raised in foreign currency.

"How does that matter? In the end it will come to us in rupee. Moreover, a number of foreign institutional investors are interested in picking up stake in case it a private placement," the official said.

RPG control: It may be noted that the Kolkata-based R.P Goenka group currently holds more than 52 per cent in Phillips Carbon Black. At the last annual general meeting of the shareholders, the company had passed an enabling resolution to raise equity to the extent of $50 million.

Phillips Carbon Black is currently the ninth largest carbon black manufacturer with an annual capacity of 2.7 lakh tonnes.

The proposed power plant at Durgapur would be the second power unit of the company. The first is located next to its Baroda unit. The capacity of this unit is 12 MW and it has a power purchase agreement with Adani Power Trading Corporation.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page