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Our Bureau

Agrees to provide irrevocable Government guarantee

Hyderabad , Nov. 13

The Andhra Pradesh Cabinet today approved a proposal of AP Transco to raise about Rs 300 crore through private placement of Vidyut Bonds, and agreed to provide irrevocable Government guarantee.

Following a request by the AP Transco to mobilise additional resources, the Government permitted it to mobilise up to Rs 975 crore. It is aimed at discharging the liability towards the arrears of agricultural consumers, which were waived by the Government.

The fund raising would span four financial years of 2005-06 (Rs 200 crore), 2006-07 (Rs 300 crore), 2007-08 (Rs 125 crore) and 2008-09 (Rs 300 crore).

The Cabinet also approved the AP Transco proposal to raise additional funds through Vidyut Bonds with a coupon rate of 8.70 per cent to 8.97 per cent payable semi-annually. Crisil and Icra had provided the rating for these bonds.

SUGAR CO-OPS

The Government has also agreed to provide guarantee for a sum of Rs 221 crore to help revive nine sugar co-operatives, whose net worth has turned negative as also to support four more mills to meet their working capital requirements during the ensuing cane crushing season.

These 11 sugar co-operatives in the State are estimated to crush about 27.35 lakh tonnes of sugarcane during 2006-07 season and produce 27.35 quintals of sugar at an average sugar recovery of 10 per cent.

In other related decisions, the Cabinet approved a proposal to create three Greyhound regional command centres at Kurnool, Vizag and Kadapa.

LAND ALLOTMENT

The Cabinet also cleared a proposal to allot 270 acres of land for a paper mill being set up by WhiteField paper mills in the State with a total investment of Rs 480 crore. Of this, about Rs 280 crore would be through promoters' equity and the rest from the public.

More Stories on : Corporate Bonds | Power | Andhra Pradesh

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