The Hindu Business Line : BSES to make preferential offer to Reliance group, FIs

THE board of BSES Ltd - the company to be re-launched next week as Reliance Energy - today approved a preferential offer of equity shares and or equity related securities to the Reliance Group and major institutional shareholders, to generate resources for future growth.

Pending the approval of shareholders, the preferential offer will be made at Rs 640 per share, the price arrived at in accordance with SEBI guidelines, Mr Anil Ambani, Chairman and Managing Director, told mediapersons.

BSES, acquired about a year ago by Reliance Industries Ltd, has a customer base of about 25 million in Mumbai, Delhi, Goa and Orissa. The Reliance Group will subscribe to over two crore equity shares of the company aggregating Rs 1,400 crore. Institutional shareholders such as LIC and GIC have agreed to subscribe to up to nearly one crore shares, aggregating over Rs 600 crore, he said. The Reliance Group's shareholding in Reliance Energy would stand reduced to around 49.5 per cent from 58.2 per cent, upon full conversion of the $120 million (Rs 580 crore) Foreign Currency Convertible Bonds (FCCBs) issued by the company in October 2002.

The preferential offer would result in the Reliance Group's shareholding in Reliance Energy increasing to about 53 per cent. Further, the BSES board also approved the issuance of an additional amount of Rs 1,000 crore through equity shares and/or equity shares with differential voting rights and/or an international convertible bond offering, he said.

Reliance has confirmed its willingness to subscribe to the additional Rs 1,000 crore, to the extent permitted by the SEBI takeover code. He said that Reliance's shareholding in Reliance Energy would increase to about 56.5 per cent in the event of the additional Rs 1,000 crore being taken up by the Group.

Elaborating on Reliance Energy's future plans, he said, the proceeds of the proposed offering would finance Reliance Energy's projects in generation, transmission, distribution and trading power.

The company is setting up a gas-based mega power project at Dadri, Western Uttar Pradesh, at an estimated Rs 10,000 crore. The project has an initial capacity of 3,500 MW and is being implemented by a new company, Reliance EGen Private Ltd, with Reliance Energy as the lead equity sponsor.

On distribution, he said, Reliance Energy's two power distribution companies in Delhi (Discoms) propose to incur capital expenditure for systems development to meet the growth in load, among other things and the total capital outlay is around Rs 3,500 crore.

Meanwhile, the company will be investing in automation and systems for better delivery in its Mumbai distribution areas. Also, he said that the energy company has applied for licences for building new networks in cities such as Pune, Nasik and Aurangabad.

The energy company, with affiliates, also expects to make capital investments to the tune of Rs 20,000 crore over the next five years in projects for generation, transmission, distribution and trading of power.

More Stories on : Power | Preferential Allotments

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

Stories in this Section
BSES to make preferential offer to Reliance group, FIs

Hind Motors to launch LCV

With the political kite flying high — Sensex may test support levels

M&M mulls assembly line in Indonesia

`India can do well in manufacturing too'

Do the markets have the stomach for IPO feast?
Yes, say lead managers

Tough call for retail investors