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Business News/ Companies / Tata Power plans to raise Rs7,000 crore through NCDs
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Tata Power plans to raise Rs7,000 crore through NCDs

Approval has been sought from shareholders, according to notice sent out for company's AGM to be held on 13 August

As per the notice to shareholders, NCDs, issued on private placement basis, are a significant source of borrowings for Tata Power. Photo: Priyanka Parashar/MintPremium
As per the notice to shareholders, NCDs, issued on private placement basis, are a significant source of borrowings for Tata Power. Photo: Priyanka Parashar/Mint

New Delhi: Tata Power Co. Ltd, which is pursuing “aggressive growth plans", has sought shareholders’ nod to raise up to 7,000 crore through issue of non-convertible debentures (NCD).

Besides, the leading private power utility has proposed increasing its borrowing limit to 27,000 crore.

Approval has been sought for raising up to 7,000 crore through issue of NCDs on private placement basis, according to notice sent out to shareholders for company’s annual general meeting to be held on 13 August. The approval would be valid for a period of one year and the amount would be within the overall borrowing limits.

As per the notice, NCDs, issued on private placement basis, are a significant source of borrowings for the company.

“The borrowings of the company presently aggregate approximately 11,000 crore," it added. Tata Power has also sought permission to increase its borrowing limit to 27,000 crore in order to meet financial requirements for projects as well as other corporate needs.

“In view of its strategic intent to be the largest integrated power company in India, the company has aggressive growth plans in the fields of generation, transmission, distribution and fuel securitisation," the notice said.

Noting that it is in the process of executing various thermal, hydro and renewable energy projects, Tata Power said these works would entail high capital expenditure, which needs to be financed by debt and equity.

“The company is also required to refinance Foreign Currency Convertible Bonds of 2,000 crore, maturing in November 2014, and extend support to Coastal Gujarat Power Ltd, a wholly-owned subsidiary," the notice added.

According to the company, the proposed borrowings might have to be secured by way of mortgages, charges and hypothecations on its movable/immovable properties. “As the documents to be executed by, with, or in favour of, the lender/parties may contain the power to take over the management and concern of the company in certain events, it is necessary for the members to pass a resolution for creation of mortgages, charges and hypothecation to secure such borrowings," it noted.

Since security to be provided is usually 1.25 times the amount borrowed, it is proposed to seek members’ consent for creation of charges up to 33,750 crore, the notice said.

Tata Power has an installed electricity generation capacity of more than 8,500 MW.

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Published: 13 Jul 2014, 09:08 PM IST
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