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Kohinoor Mandal

Plant cost of Rs 115 cr to be funded by debt, equity

Kolkata , Sept. 14

Phillips Carbon Black Ltd (PCBL), an RPG Group company, is raising approximately Rs 50 crore of equity for funding its 30-MW power plant at Durgapur in West Bengal.

Talking to Business Line, Mr Sudhir Sahgal, Managing Director, Phillips Carbon Black, said the total cost of the power plant is Rs 115 crore and it would be funded through a mix of debt and equity.

While the equity contribution would be to the tune of Rs 40 crore, the remainingRs 75 crore would come as debt.

On Wednesday, the board of directors of the company decided to issue 75 lakh convertible warrants on a preferential basis of Rs 10 equity shares at a price of Rs 66. The issue is offered to promoters and their associates.

"We would be raising Rs 49.5 crore. Out of it, Rs 40 crore would be utilised as a capital investment for the power project and the rest would be used as working capital," Mr Sahgal said.

PCBL, which is India's biggest carbon black manufacturer and the ninth largest in the world with a capacity of 2.7 lakh tonnes per annum, planned to set up this power plant long ago.

The plan was temporarily shelved because of the adverse market conditions of carbon black. Phillips Carbon Black's finance suffered because of rising fuel costs and it accounts for 60-65 per cent of the total material bill.

Subsequently, the situation changed. For the quarter ended June 30, the company recorded gross sales of Rs 256 crore and a net profit of Rs 14 crore. However, it ended the last fiscal with a net loss of Rs 14.64 crore on a turnover of Rs 825.51 crore.

This power plant would be the second power of Phillips Carbon Black. The first one is located at Baroda and its capacity is 12 MW. It has a power trading agreement with Adani Power Trading Corporation. Dasturco, ILFS Power and Descon have already conducted study for the proposed unit in Durgapur.

More Stories on : New Projects | Power | Preferential Allotments | Chemicals

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