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Power Finance public offer slated for April-June — Merchant bankers to be appointed shortly

Our Bureau

New Delhi , Jan. 25

POWER Finance Corporation (PFC) on Tuesday said its maiden public offer of 10 per cent fresh equity, along with the sale of the Government's 5 per cent equity in the public sector firm, is likely to take place in the first quarter of the next fiscal.

"We will enter the market with our initial public offer and for the proposed the sale of Government equity during April-June this year," the PFC Chairman and Managing Director, Mr V.K. Garg, told newspersons here.

The public sector firm would shortly appoint merchant bankers for the IPO from among the six short-listed firms, including Citibank, ICICI Securities, HSBC, Enam Financials and Kotak Mahindra, he said. PFC's paid-up capital, which is now at Rs 1,030 crore, would rise to Rs 1,134 crore following the issue, Mr Garg said.

The Government's holding in the company would come down to 86.36 per cent post-issue, from 100 per cent at present.

Responding to queries on the price band or the amount that the company plans to raise from the issue, Mr Garg said it would be decided through a book-building process in consultation with the merchant bankers.

He also said the company plans to invite expressions of interest for the setting up of the proposed `ultra' mega power projects of 4,000 MW each by January 31, with the aim of transferring these plants to potential private companies by the end of 2006.

Mr Garg said PFC has been made the nodal agency and would set up five shell companies as its subsidiaries for developing five ultra mega power projects of 4,000 MW that entails an investment of Rs 15,000 crore each.

Two of these plants would be at pithead locations in Chhattisgarh and Madhya Pradesh and use domestic coal.

Three other projects would be at coastal locations in Maharashtra, Karnataka and Gujarat and would use either imported coal or a blend of domestic and imported coal.

PFC would appoint consultants for conducting various studies by this month-end and invite pre-qualification bids over the next two months.

The projects would be ready for transfer to potential investors by December this year, he said.

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