The Hindu Business Line : Ratnagiri Gas equity structure in for change

New Delhi, Oct. 28 Ratnagiri Gas and Power Pvt Ltd (RGPPL), the erstwhile Dabhol Power, is all set to undergo a change in equity structure along with the change in the company’s classification from the current private limited status to a limited company.

This, in effect, would mean that the current status of the company would change from that of a closely held company to a widely held company, and enable RGPPL to increase its capital base.

“The change in status would enable the company to enhance its capital base by opening more avenues for raising funds, including the option to tap the capital market,” Mr R.K. Goel, Chairman, RGPPL said.

The company board, which is expected to meet soon, is to consider the change in financial structure of the company. The current authorised capital of RGPPL is Rs 2,000 crore and the paid-up equity capital is Rs 765 crore.

Restructuring

The promoters GAIL (India) Ltd, NTPC, and MSEB Holding Co Ltd together have infused additional funds to the tune of Rs 1,200 crore. Despite this infusion, the company has a deficit of around Rs 1,500 crore. “The entire financial restructuring will take 30-40 weeks once the board of the company approves it. Hence, if the company decides to come out with an initial public offering (IPO) it would be not before 2009,” he said.

Unveiling the strategies for completing the pending work on the project, Mr Goel said that subsequent to the financial restructuring as a widely held company, all the doors will be opened for mobilising funds from the market — deep discount bond, public deposit, or an IPO.

LNG terminal

RGPPL requires funds to complete the liquefied natural gas (LNG) terminal. The company is looking at various options to source gas, as its Block III is expected to be operational soon. By early January next year, all the three blocks will be ready, which would leave only the LNG terminal to be completed.

For all the three blocks the company will require 2.10 million tonnes of gas. Currently, the company is getting 1.5 million tonnes of gas from Petronet LNG Ltd (PLL) at a pool price of about $ 5.83 per mBtu at delivery point. This gas is available till September 2009. RGPPL is producing 645 MW of power at Rs 3.01 per unit (variable cost: Rs 2 and fixed: Rs 1.01).