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REC Ltd on Thursday said it targets to raise $750 million via external commercial borrowings (ECBs) in 2012-13. This would be part of the Rs 30,000 crore debt that the public sector company aims to mop up in the current fiscal.
Mr Rajeev Sharma, Chairman of REC, said the company would need approvals from the Ministry of Power and the Reserve Bank of India for the ECB, which will be a mix of bonds and bank loans. “Our target for the current fiscal is Rs 30,000 core, through a mix of instruments, ECBs, FCCBs, infrastructure bonds etc,” Mr Sharma added.
He was speaking to media persons after the company’s fourth quarter of 2011-12 numbers. The company has reported 8.9 per cent increase in net profit for the quarter under review.
“Government has given Rs 10,000 crore tax free bonds to Power Ministry. We expect to get Rs 5,000 crore of it,” said Mr H.D. Khunteta, Director (Finance), REC.
The infrastructure finance company is still awaiting final clearances from Government to raise $1 billion through Foreign Currency Convertible Bonds (FCCBs).
“The Department of Disinvestment gave its go-ahead for the FCCB on February 2. Now, the nodal Ministry of Power would move a Cabinet note for getting the approval of Cabinet Committee of Economic Affairs,” said Mr Khunteta.
On maturity of FCCBs, which would have five-year tenure, Government holding in REC would come down to 56.74 per cent from 66.8 per cent currently.
At the same time, REC plans to increase its lending to the renewable sector. “We have finalised our guidelines for renewable energy funding. We have also reduced our interest rate by 25 basis points for renewable projects,” said Mr Khunteta. In 2011-12, the company sanctioned Rs 342 crore for solar, wind and biomass projects.
REC has announced final dividend of Rs 7.50 for every share in 2011-12. It targets to disburse Rs 27,200 crore in 2012-13. Last financial year, it despatch loans for Rs 28,000 crore, while borrowed Rs 30,800 crore. REC reported a net interest margin of 4.23 per cent in the last financial year.
siddhartha.s@thehindu.co.in
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